July 5, 2010

Prolonging our debt agony

Posted in Debt · 95 comments ·

In 989 AD, Ethelred the Unready, the Anglo-Saxon king of England, introduced a deeply unpopular tax called Dangeld (Danish gold).

These were coins that Ethelred minted from the tax and they were referred to as Dangeld or ‘Danish money’ because of the powers the king ascribed to these coins.

Having minted the new coins, Ethelred then waded into the Wash off the Norfolk coast and proceeded to throw the money into the sea.

This bizarre ritual was an effort to persuade the tides not to come in.

If he could somehow bribe the sea with money, the impending Norse invasion might not happen.

He would then live in peace and prosperity, safe from the ferocious Danish longships.

Ultimately, of course, the tides came in, the Vikings raped and pillaged, and the Anglo-Saxons were routed. Dangeld couldn’t prevent the inevitable.

The image of the demented king wasting money is one that recurs again and again when I see our politicians blithely writing cheques with money we don’t have in order to keep the markets happy.

This is particularly the case when we see the exchequer figure showing an overspend of €8.8 billion in the first six months of the year.

And this is without Anglo.

No amount of government promises or IMF and ECB guarantees is going to prevent Ireland from defaulting, the question now is not whether we default but how we do it.

The guarantees only prolong the agony.

And the agony is being captured as people and companies default on debts built up during the boom which we/they cannot afford to pay back.

New figures, revealed last Friday, showed that the number of companies unable to honour their debts was 27 per cent higher in the first six months of this year compared to the same time last year.

This trend will continue as incomes fall and debts rise.

We simply took on too many debts in the good times and now have a choice: either we stay in business by protecting our cashflow and default on these debts or we fold.

Many businesses are choosing the former and this will be the dominant feature of the Irish economy for the foreseeable future.

All the while the government keeps writing cheques, abusing its position in a most cavalier fashion. Ireland has spent the last two years piling liabilities on to the national balance sheet, to the extent that our national debt has more than doubled.

The ‘contingent liabilities’ via the banks dwarf our GNP and we use the national Pension Reserve Fund (NPRF) as an ATM for the bust banks instead of keeping it to meet that other great, unfunded liability, future pensions (net costs of future public service pensions will be €108 billion).

We should let the guarantee lapse in September and get on with the adult job of facing the music with our creditors, rather than extending the guarantee again.

None of this borrowing makes sense unless the Department of Finance is very dumb, in which case they are waltzing up the cul-de-sac of a massive crisis where we default in chaos.

Or there is a remote possibility that they are very clever, in which case we are borrowing while we can, in order to default in an opportunistic and organised fashion at a time of our own choosing.

Either way, this country is highly likely to default on our debts.

The private default is well under way and it is only a matter of time before this spreads to the public sector.

Private debt (household debt) is now €167 billion.

But adding the household debt to the national debt (€167 billion plus €84.6 billion) gives €251.6 billion, or €132,421 per worker in the country.

Friday’s exchequer deficit for the first six months of the year was €8.9 billion, or another €4,684we can add on to the total above.

This will sink us.

Remember, the ability of the public sector to pay its debts is a function of the private sector ability and willingness to pay taxes.

If the private sector is unable to generate income or unwilling because it chooses to work in the black rather than legal economy, the government is goosed.

A default is not only what is likely to happen here, but it is actually what should be done to kick-start the economy.

The biggest myth doing the rounds in Ireland is that a default would lead to us being cast into the financial outer darkness.

Nothing could be further from the truth. Consider the case of Uruguay.

The country defaulted in 2002.Notonly did the markets forgive Uruguay, but today Uruguay’s five-year bonds are trading at 2.7 per cent without any ECB or IMF guarantees.

Ireland, on the other hand, pays 3.8 per cent for five-year money with EU,ECB and IMF guarantees.

The idea that the markets penalise debt defaulters is just silly.

Markets have no memory, they move with the next opportunity, and if by defaulting the country increases the likelihood of growth, then the markets will back us.

Let’s consider the options open to us as a serial debtor now.

There are numerous cases in recent economic history of countries heading down the road we are on – adding too much debt, too quickly, and leaving themselves open to a massive, chaotic flight of capital because the people and corporates panic and take their savings out.

This is the first option.

This ramshackle default happened in Russia in 1998. I remember this well; I was there.

The second option is to do what our government is trying to do, which is to mount up more and more debt and then try to run a society encumbered by huge debts, paying off every cent.

This is the Romanian way. In the 1980s Ceausescu decided to pay off Romania’s national debt.

Very few countries have ever tried this – national debt is rarely paid off, it is just recycled. His attempt to do this led to the people in Romania starving because the country exported everything it produced in order to meet the president’s plan.

This plan would probably prove as unpopular in Ireland as it did in Romania, so probably best not to go this way – although Cowen is implementing a nuanced, 21st-century version of the Ceausescu doctrine: reckless lending, followed by reckless repayment. There is a third option.

This is the Uruguayan option.

In 2003,Uruguay was looking like it might have a serious sovereign debt crisis, but rather than going into denial and allowing the crisis to develop, it faced its problems and sought a solution with its creditors.

Professor Reinhart, who was working for the IMF at the time, said of the deal that Uruguay did with its creditors: ‘‘Everybody got together in a civilized way, and it was very successful.”

The restructuring meant that creditors took an average haircut of 13 per cent and maturities for the debt were changed. Uruguay faced up to reality.

Paying off the debts as they stood would have led to impoverishing the people of the country and eventually leading to a more chaotic, Russian-style default.

By being adult, it maintained access to capital markets and did the best thing for the people of their economy.

Unemployment in Uruguay has been falling steadily since the 2003 high of nearly 20 per cent, to stand at 7.5 per cent.

GDP rose 8 per cent in the past year and has not risen by less than 6 per cent since 2003.

I visited Montevideo in June 2007 to make a documentary on the similarities between the economies of Uruguay and Ireland. It was broadcast on RTE in September 2007.

The parallels are now uncanny.

  1. Deco

    Well, I think that at this stage the authorities will go ballistic.

    But let’s not stop. McDowell called the Bertie Bowl 1.0 a Ceacescu style monument to self importance or something like that. So, along comes Johnny Cash and gives 400 Million plus to the FAI (the bit at the beginning of Failure), and we have Bertie Bowl 2.0. And it is sponsored by an insurance company that is is potentially exposed to any bond non-payments (though we do not know for certain – but the likelihood is high given that the banks involved were not that far away).

    And now we have the comparison with Ceacescu. Is anybody outraged ? Is your pride enraged ? Well, if you are, then you left it a bit too late. This is the reality of the current financial predicament. We have a rather unusual interpretation of Marxism at work in this country. The workers pay the taxes, and the providers of capital get the subsidies. This is not capitalism. It is crony capitalism. So, as Constantin Gurdgiev is advocating, we should stop pretending to be a capitalist economy. Of course the end result is that the 19 Billion borrowing per year will have to end. But this is a good thing. It would force us to bring in some badly needed efficiency into the state. And this means hard serious institutional reform. There are those who are needed in the state system. And there are those who are serving neither a social need nor necessity.

    Incidentally, Romania was ok to live in, in the 80s if you were related/connected to important players in the political establishment. And there were lot’s of people doing no work, because they were thrown state jobs as a favours, rather than on merit. There was a lot of cronyism and nepotism in Eastern Europe under Marxism. A lot here now.

    Reform !!! If we do not reform we shall become a fully fledged BaNAMA republic. As Michael O’Leary commented on the radio, we are crying out for leadership, and there is none from the political establisment. Instead stupid laws about irrelevant minutae scope issues like stag hunting and other GP demands.

    Well done David. We need two things to get us moveing.

    1. And honest appraisal of the state of the economy.

    2. And an intelligent approach towards generating sustainable, cost effective, economic activity and wealth generation.

    We are getting the opposite to both from the political establishment, IBEC/ICTU, RTE/Pravda, the quangoes, etc….

    • Ballistic? One would hope so Deco.
      Surely in any functioning society, this assessment by an internationally respected Economist with a penchant for accurate predictions should send shivers down collective spines.
      If not, then there is obviously a serious deficit of spines running the whole show.
      I was seriously thinking about retiring to Argentina a few years ago, following two brilliant holidays there. After this article, I might dust down the passport.

      BTW, thanks for the Apres link below. V Funny but too close for comfort.

      • Deco

        furrylugs, there is a definite lack of spines and an even more glaring lack of brains, amongst those running the show.

        And you are correct….it is a “show” most of the time….a pretence to keep us amused.

  2. paddyjones

    It is good to see DMcW give us a more honest and concise view of our most pressing problem….DEBT. I am not so worried about the size of the debt but more worried about our ability to repay the debt. Size is all relative as all developed countries in Europe have large debts. The problem is that we have no means to repay the sovereign debt, our deficit is roughly 19 billion a year and we just borrow more each time a traunch becomes due.
    Last week showed us large scale movement of funds from the equity markets into government bonds, the flight from risk to a more certain form of investment. I myself moved from cash to junk bonds as the profits are better. The US 10 year bond moved below 3% as demand for bonds increased. Equities have made large losses this year as the risk of a double dip increase and of course the sovereign debt worries persist.
    In a funny way the demand for government bonds has released some pressure about the sovereign debt worries as markets get used to the idea that governments are now part of the “market”.
    I can not see the Irish Government defaulting in the near future as demand for government debt increases.
    It just goes to show that there are savers and borrowers on this earth and that savers will always win in the long term.

  3. Malcolm McClure

    Thought struck me: would that be a McLaughlin gelding tax or an O’Brien gelding tax? Today’s news confirms anyway that the conjectured NAMA profits were a load of balls.

  4. SM

    They might wait until next year, then default and as the election looms. The economy starts to grow and everyone forgets the previous four years. That’d be typical FF manipulation of the people.

  5. Reality Check

    “La dueda eterna” – The eternal Debt
    Is this a vision of the future for us?

  6. Maire

    David I have always agreed with everything you say, I have stuck up for you in newspaper articles and you know that this Country is in trouble and no one is listening to you and I thank you for trying to advise and help the Irish people. There is one question that I need to ask you David and that is, why oh why did you advise the Minister for Finance to give a guarantee on that awful night. It seems to me that this was very bad advice. If we had not given that guarantee on that night we would never had NAMA and we would not be pumping billions of tax payers money into Anglo and the other Banks. Sure the Banks would all be gone, house prices would go back to realistic values, we would be forgiven our debt as you pointed out that it is written in the Bible that after seven years OUR LORD said thy shall forgive Nations their debt. Our debt would be forgiven and we could start again and so I say the Bank guarantee on that night was a mistake. Everyone from A to Z wants their piece of the pie and no one wants to say we are in debt up to our ears. At the end of it all David, people like myself who are trying to buy a house. I am having to look at houses on the internet at wayyyyyy over inflated prices, some are even more expensive than they were in the boom. I am currently living in Co Cork and I am stuck down here and I can not get home because there is no job for me at home in Co Louth. Take a house in Hayfield, Model Farm Rd, Cork for instance, these houses in the boom were being offered to me at €350,000, now that we are supposed to have had a property crash and house prices are supposed to have come down 30% and this famous 50%, why then can someone explain to me how a house in this estate in todays market or lack of it, has an asking price of €1.2million, €350,000 IN THE BOOM at the height of the property market and now an asking price of €1.2m. I done the maths and the house would have cost about €100,000 to build and maybe at the time they were built, they might have paid €70,000 per site because they were built before land prices went up, that makes a cost of €170,000, how ridiculous is an asking price of €1.2m if we are in a crash and supposed to have come down 50%, the correct price for this house from boom to bust should be €175,000 at a 50% reduction. I e-mailed Brian Lenihan and asked him to help me understand why auctioneers are getting away with putting pie in the sky ridiculous valuations on property and why someone is not prepared to bring in some sort of legislation to stop them being a law on to themselves, I am still waiting on a reply. Regards Maire

    • Colin


      I think you’ll find David advised for a Temporary Guarantee, of 3-6 months to avoid a run on all the banks here and yet enough time to put a proper plan in place. Lenihan took David’s idea and then bastardised it by making it a de-facto Permanent guarantee, giving us all the sh1t that has hit the fan so far.

      Don’t buy a house, unless its price has fallen over 70%. Don’t give in to peer pressure or your parents. You must educate yourself in these matters, and learning from David is a good place to start because almost everyone else in the mainstream media are obfuscating and advancing their own vested interests at the expense of yours. Constantin Gurdgiev, Morgan Kelly and Peter Matthews are excellent sources also.

      • Maire

        Thank you Colin for taking the time to advise me I appreciate it very much as I just do not know what to do, Regards Maire.

        • uchrisn

          Marie you are spot on with your letter to Mr. Lenehan about brining in legislation to stop price-fixing or collusion on property values. This is one of the main reasons that Ireland is suffering so much. In 2005/6 people stopped buying houses. So the price should go down in a market economy, right? Unfortunatly any rare delevoper that cut his prices to pay back his loans then was outcast by the other developers. I remember a case where other developers bought up all of a certain developers propeties in order to stop him from reducing the price.
          The banks didn’t want property prices to drop. Their share value would have fallen and their job is to look after the shareholder. The banks allowed the developers to restructure their loans. For example instead of lowering their prices to sell propeties and pay back their loans to the banks then, they extended the loan for 20 years with rental income to be set against it.
          The government didn’t want house prices to drop. It would have mean lost revenues and problems for the banks so they didn’t get involved.
          The Irish people didn’t want house prices to drop. The majority of the electorate were delighted with the safe feeling of earning 80,000 a year from increasing equity so they didn’t raise an eyebrow.
          So the market economy didn’t function like it was supposed to. Houses prices were kept at high levels despite no buyers and an increasing list of empty properties.
          The result was that the banks have no money.
          Unfortunatly the government pumped fresh money into the banks meaning that anyway you had to pay for the overpriced properties wheter you like it or not.
          I suppose the moral of the story is that democracy is not a perfect system.
          So collusion is still happening in the housing market to keep prices up. Will Mr. Lenihan try to fix it. Ask your neighbours with properties if they want him to.

          • Colin

            Excellent Analysis.

            Heard some “John” on Pat Kenny’s radio this morning, in a quandry. He took out a mortgage on a 2 bed apartment in 2002. In 2006 he took out a mortgage on a 3 bed apartment because now he had a partner and two children. The bank allowed him to release equity in the 2 bed to fund the new property. He had a total mortgage of €800,000.00 even though both he and his partner only earned a total of €100,000.00 a year.

            He now claims he tried to sell the 2 bed to fund the 3 bed, but was “unable” to sell it. Now, this is BULLSH1T! Here’s the translation; He did not want to sell the 2 bed because he did not like what he was been offerred.

            Everything can be sold! People who tell you they can’t sell something are liars! The truth is they do not want to further reduce the sale price because they are still greedy and do not want to face up to the real market prices out there.

    • Deco

      Maire – there are rumours going around concerning the availability of finance.
      If you want to buy a property ‘asset’ it is not a problem. Of course there is more vetting than before. But basically, the money is there at the end of the tunnel. You just go through the hoops as such.

      If you want more finance for your business, forget about it.

      The asset market has to be propped up for the sake of the valuations of assets going into NAMA. Basically the bankers are trying to save their own hierarchies, cliques, and careers. And to attain this objective, it is all about NAMA.

      But ‘Jimmy’s furniture factory’ (for example) is not going into NAMA. No bailout there. In fact he is part of the solution, because he will provide the money for the banks. Therefore the official solution is for Jimmy, and pals, to work for free, to pull down expenses massively, and thereby reducing the borrowing requirement. Except sale prices have dropped. And demand has collapsed. So even that is a fools errand for Jimmy and Co. He has to pay rates, expensive ESB, and all sorts of charges, stealth taxes, taxes to encourage him to do things that he would not do if he was left to his own devices, like reduce his carbon footprint, etc.. etc… But anyway, his back is to the wall. It is an insiders policy framework for outsiders. Of course Jimmy might eventually die of a heart-attack, and you can forget about quality time with his 14 year old son who wants to learn how to fly fish on a Sunday afternoon. Are his missus and kids are not going to sue the banks, are they ??? No. they will take it.

      Dan Boil promised that the banks would get saved before the factories. He said it on Six One News, the day that the Waterford Crystal plant got into trouble, and the workers took over the factory to keep their jobs. Meanwhile Coughlan was in Texas making a donkey of herself (again) over the Dell rationalization. Boil is the decider of GP economic policy. And the GP are the tail that wags the dog. Basically, we have a conscientuous decision to not create wealth. Instead protecting the system is what matters.

      The best investment is your own education. (We have a contributor, Tim, who keeps telling us this, though he has gone queit recently). Time spent reading books that tell you how to better yourself and your opportunities, is time well invested. Yes, a lot of people in Ireland think that they are educated, because they have been told it again and again. But nobody has really looked at it serious. Maybe up to the age of 17 Irish people are extremely well educated. But outside the education system, in the university of life, the young citizen is bombarded with messages requiring conformity to behaviours that divert money from those that work to those that are connected. It is this that sustains the crooked ‘something for nothing’ culture that is poisoning our society. There is a consistent effort being made to develope habits that will ensure that the citizen is never a threat to the establishment – that he will prefer the sports circuses to the book(any form of intellectual development). Or in her case the soap opera/celebrity shows to the book. And let’s face it, it is working. We are being induced into a childlike state of looking for positive vibes for buyer behaviour. (The thoughts of James Howard Kunstler for example bring this up a lot).

      • By the blessed ears of the hairy prophet, after that speech, I’d vote for you on any platform. Nicely put Deco.

      • Maire

        Thank you also Deco for taking the time to give me your views and help me out, much appreciated and as furrylugs says I’d vote for you, Regards Maire.

      • Deco

        Furrylugs, Maire – thanks for your encouragement. I am not looking for votes. That is not my objective. I a not interested in politics. There is a more fundamental problem anyway that needs to be addressed. It goes back to the American joke
        Q. What created the sub-prime crisis ? A. Subprime thinking.

        My objective is to improve the quality of the analysis, to improve the intellectual debate. We have not done this properly and this is why all the stupidity took hold. We became irrational. And this was the ticket for powerful interests to perform wealth distribution at the expense of the jugglers, and to the benefit of the gombeens. The way I see it, they control the advertising revenues of the media, and the media takes the advertising revenues and does their bidding. “Don’t offend our sponsors”. Therefore any public intellectual analysis is filtered to ensure that this mechanism is not undermined. But, we can deal with this by being sceptical of anything that is not realistic, or which does not pass the common-sense test.

        The way to get around this ‘influencing’ by vested interests like IBEC etc, is by better intellectual discussion between people. And the internet makes this possible.

        So, if you want to change Ireland, don’t vote – read all you can about human performance, human development, intellectual analysis, etc.. And never trust the official story on anything, because it is usually ‘influenced’ in such a way as to ensure that it consistently encourages the individual to reduce their own interests below those of vested interests.

        This is what David has been doing for most of the past decade. This is what Shane Ross has been doing for two decades. This is what Matt Cooper and George Hook are doing. This is what is most aneathma to the Ditherer, and all the ditherers that come after him.

        To end deceit, apply truth !

    • Hi Maire, Consider buying your own site and make it a good one, put out a tender for a reputable builder on a site e.g http://www.onlinetradesmen.ie But look for previous work they’ve done and don’t go for ridiculously low bids. Good luck with your project.

  7. Deco

    Actually, the good news is that we have a strategy.
    The DoF have come up with a means for the whole problem to be fixed.


    Well done the Apres Match team.

  8. Peter Atkinson

    Pardon my ignorance but didn’t the venerable, most powerful Lord of Kinsealey the Rt Hon Charles J. Haughey tout this solution during the heady days of austerity in 1980.During his “belt tightening” speech it was suggested that we either tighten up or f**k off to other parts of the globe as the country clearly couldn’t afford to maintain our cavalier high flying living.As we all know now he meant he couldn’t spare any of his stash to feed or clothe the peasants living on the outlying lands of his estate called Ireland.I seem to remember that Mexico were going through a similar tough time around this period and did default and the look at the awful predicament they ended up in, once again qualifying for the World Cup and doing their country proud after hosting a world cup themselves and surviving a serious earthquake.We can’t even get the Bananna Republic concept right.We live in Shitsville not Smalltown where the most important day of the week is Sunday and not for religious reasons (and God help us we could do with a bit) but how the county GAA club are progressing throughout the summer months culminating in what can only be compared to a religious frenzy for two Sundays in September.I personally couldn’t give a toss wheather DJ or Ja are knockin seven shades of shit out of each other trying to work out who can do five in a row.While we have half witted politicians wearing flat caps arriving in Kildare Street in serious need of interpretors so the unsuspecting public can actually understand their subtrafuge we have zero chance of climbing out of this hole we are in.My advice to anyone with an ounce of what is fondly known in this country as “cop on” is to get out before the rest of the world issue deportation orders on us all.We are a failed state with failed policies who treat the needy and the vulnerable with nothing but contempt.I wonder how many human rights we are violating in the process.

  9. David, always finding parallels with Uruguay. By mid 2002, crisis exploded in Uruguay. Argentineans and other foreign depositors took away their money, and the banking system was not able to stop it. It wasn´t uruguayan´s money, nor mortgages at all, neither a property boom. It was simply “playing with fire in the financial game”. Government devaluated currency by an 80%. Exports fuelled by exchange rate improved quite a lot. But basically, as you say very clearly, “uruguay faced up to reality”. Government by then, was serious. The motto by that time was, “uruguay fullfills contracts”. Foreign investors looked silently what was happening, and slowly investmentes started to arrive to the country, driven by exchange rate, and lower wages, of course. By 2003, GDP was U$S 14 bn, in 2009 it was U$S 32 bn. Diaspora who migrated 7 or 8 years ago, started to come back from Spain, USA, Australia, etc. Diversification of exports, meat, grain, forest products and logistics services, was also a kee point. Nowadays, consumption is raising, too much to my opinion. Exchange rate is just 18% over the one before crisis. It also makes me afraid, but , contracts are still fullfilled in Uruguay. To be a serious country in a non serious neighbourhood is a threaten, but also gives you a lot of opportunities.
    By the way, in 2002, just in the crisis, Uruguay was eliminated from Japan world cup. Now, we are between the first four teams. Again, seriousness is the key factor. Regards

  10. paddyjones

    I have been thinking about Davids problem solving abilities and I have come to the conclusion that he is barking up the wrong tree, debt is never forgiven …the prolonging the agony of debt will certainly continue. Every country in Europe is facing the problem of debt and the only way out is to pay it off, but first we must stop borrowing. We must cut the deficit from its current 19 billion and then we must start to repay it.
    Default is the same as stopping your mortgage payments, there are consequences. If I stopped paying my mortgage then I would loose my house. If the government defaulted then they could not borrow 19 billion a year to keep the country going.
    Get real DMcW , this is a long term problem , it won’t just go away, get used to living with debt.

    • @Tim, certainly was worthwhile seeing. “Place an order in the market and cancel, manipulative placing of bids.” “We do not have a clean and fair market in this country anymore ”

      Re Actual law enforcement in the SEC, because this is electronic, and recorded, surely the evidence for prosecution is there and there’s bread crumb trail to offenders’ door.

      Why no prosecutions?

  11. Skin

    What will happen if we default?
    What will this mean to money held on deposit?
    What effect will this have on our membership of the euro?
    What is the likely effect on the rate of infalton/deflation?


  12. Thanks for article.

    re “Or there is a remote possibility that they are very clever, in which case we are borrowing while we can, in order to default in an opportunistic and organised fashion at a time of our own choosing.”

    Yep, I’ve wondered at the stupidity and said, they can’t be that stupid. Mostly, the answer comes back, yes, they can. But still there is that lingering possibility there is sense in the madness.

    So, here’s one scenario occurred to me. Suppose Lenny has been given the nod by the ECB there’s going to be a default across the eurozone for the PIIGS. The nod being to hold on, there’s going to be a breakup of the euro, or a massive default of a group of eurozone countries that will involve a second tier Euro defaulters club, for which inevitably there will be some write down for a group of PIIGS.

    “You hold on there, this will be dealt with in a structured way involving other defaulters also.”

    Nah, couldn’t be! We’re dealing with stupid incompetence alone, blind ad hoc pillaging of a country with debt austerity, arn’t we?

  13. distributist

    A pleasure as always to read your latest article.
    Did you ever entertain the theory that the levels of incompetence practiced by our Government are deliberate efforts to bring our country to economic ruin? I am not suggesting that our “middle management” Government leaders are deliberately making ludicrous decisions, but that they are taking the advice of top civil servants whose purpose is to destabilise our economy. This could even be part of a broader plan to undermine the eurozone. I find it hard to believe our Government could possibly make such constantly awful decisions unless it was being planned this way. When we consider the plight of so many Irish people today who are in debt up to their eyes, it must be remembered that for every debtor, there is a creditor. For every person, enslaved, another is enthroned. For every dollar or euro which has been lost, it has been gained by someone else somewhere. Either all the decisions of our Government leaders are the result of a wily conspiracy or they really are the most jinxed bunch of incompetents. IS this ALL planned or are we just being governed by idiots? It would be nice to think it is the latter, that way we have the hope that we can change things around.

  14. MarkC

    I have to agree, that sooner or later, Ireland will have to default. What really scares me though is that sooner or later, so will most countries in the world. What is it going to be like then?

    • mick

      David, I was at your show in the Peacock recently, great show by the way. Something Michael Noonan said during the week has me thinking. You recommended in your show that NAMA be reversed but MN says that most of it can’t be reversed now and that will be FG policy in government. Which of ye is right? I suspect you are because you’re not a politician but can you or someone explain the two polar positions.

  15. Tull McAdoo

    Cowen will not default, because to do so would be to admit, that his leadership, his tenure at Finance, his nurturing and grooming all these years by nanny Fianna Fail was a complete failure. As I have pointed out before and hopefully the penny has dropped with ye, it is this, in Cowens eyes Fianna Fail rules Ireland and Ireland is there to sustain Fianna Fail. It is vital that ye grasp this point to understand how all the years soaking up power and privilege has in fact turned Cowen into a dictator, or Cowensescue. Although FF will tell ye its all part of their “cult of the leader”, philosophy, and strong leadership which the County needs at this particular time of difficulty, with no mention of the fact that all this shit is of their making.( remember Haughey).

    Cowen will in fact pursue a scorched earth policy with regard to Ireland in order to save Fianna Fail, as witnessed by the fact that he threw Irelands pension fund at the Banks with Fianna Fails two chief Banks Anglo and Nationwide the biggest failures, and with Anglo taking the dubious honour of being the Worlds biggest failure at 15 billion in 15 months, a record it seems determined to retain for another year if losses continue at the present rate. This was followed by Irelands massive borrowing via Nama, followed by a continuous stream of cut, slash and burn of Irelands citizens. The final piece of the jigsaw if he remains in power will be to sell off any or all of the semi-states or whatever utilities he can in order to revive the fortunes of his beloved Fianna Fail.

    If ye think I am wrong, then think about what Cowensescue , said himself in the Dail “ I will decide what needs to be done” “ I will decide what policies will be followed “ “I will decide what’s in the best interest of this Country.”” I will write whatever cheque I need to write………

    Just as a footnote let me add that Cowensescue see himself as the new Lemass, with 25 years plus in the bowels of FF getting ready for the big day. Sorry Brian but Lemass would have spent the money on the Country and increased its ability to trade its way out of its present difficulties by growing its GNP. He would have helped the Country retain its dignity and grow in strength, having faced adversity and was not found wanting. Brian its called leadership and it usually attaches itself to people of vision….. Goodnight Ireland ,sleep well. Tull .

  16. insider

    News from the trenches – the country is stuffed.

    On my last visit I purchased some precious metals. Given my strong local currency and the VAT refund it made perfect sense.

    So on the way out I lodged the form to claim the VAT back. I wait 8 weeks and no refund hits my account. So I call them up and it’s like “oh sorry sir I have no idea why it hasn’t been processed”. I’ll tell you why it’s cos the country is broke. Chancers better pay up soon.

  17. Deco

    Here is some “Humor” from the US. There is a theme in a lot of these – it concerns Independence Day.


    Anyway, after reviewing these jokes, you might see parallels concerning the predicament of the 53rd state.

    And, I think that this theme should resonate with us also. We are also entangled to imported fossil fuel dependence – with the ESB making sure that there any renewable energy producers subsidise the ESB rather than compete with it. (This is case-study gombeen behaviour by the way-control what is not yours, so as to increase your control). As David pointed out a while back, we will have to think about Nuclear Power again also. We will also have to think about the commuting plan, employment distribution, and broadband speed/coverage.

    In West Dublin there are fields that are for horses, while the people are commuting from Carlow. And the Luas will run alongside the fields full of horses. This is perfect for the 10 developers who control the supply of building land in Dublin. Essentially the land that they do not own, is off limits for residential construction, and will not undermine their price fixing – because it is owned by the state. Here we have the state assisting the price fixers.

    Likewise Gormless is trying to prevent the incinerator being built in Ringsend, even though it makes sense to have it close to where the source of the rubbish – beside the heaviest concentration of human activity. If Gormless has his way it will get sent to the Midlands at enormous cost, and creating a heavy carbon footprint. It will be the Kill dump 2.0.

    As Ming the Merciless pointed out recently, 90% of the turf cutting in Ireland is carried out by the state. Locals living in mountainous districts in the West will be prevented from cutting turf, a means of providing for their own independence. But a state owned commercial organization, BnM, full of cronies and lackies of the political establishment, will not be stopped. In fact BnM will be part of Gormless and Whine’s strategy for securing Gormless in Dublin SE-by being propositioned as part of the alternative for the incinerator. Currently BnM are competing in the waste market, even though there is no shortage of private operators. Here we go again, the imperialist tendencies of unnaccountable state companies…..And BnM will burn enormous amounts of turf, to the point that the ban on turf cutting in the West is a pointless joke. In fact the ban will force the former turf-cutters in the west to use imported oil or imported coal, or electricity from peat burning power stations.

    • In CA recently noticed hillsides covered in wind turbines, I mean 100′s on each hill, and they get a loss less wind. Most I’ve seen near Dublin is south Wicklow, near Shillelagh, hill with 7 of them. It’s like we’re living in a goldmine, but have no interest in gold!

  18. DarraghD

    David is 100% right, default is what is required. Watching this episode at the moment is like looking at someone who is seriously constipated. The only thing that will rectify constipation is the obvious difficult sometimes painful trip to the toilet. After that, it is invariably upwards and onwards.

    What is happening here is literally tragic. The alternative as we have recently seen, has been even more tragic.

    I a way, the further hardship that is coming down the tracks I think ultimately should be firmly embraced. It will bring political reality back to where it always ought to have been. As a country, we as a people are very clearly reaping what we have sown.

  19. Skin

    While the arguement for a default proposed here is laudible, I would like to know in more detail what the consequences of such a course of action would entail for:-

    Deposits held on account
    Our membership of the euro


  20. paul

    “Vested interests” is not a new phenomenon in Ireland.In 1169 the Normans invaded at the invitation of Dermot Mac Murrough, King of Leinster,because he was having a bit of trouble with Rory O Connor,High King of Ireland;”vested interests” meant that the Irish were so busy fighting among themselves it took 750 years and one Michael Collins to achieve a kind of freedom.
    Is there another Michael Collins out there who has no “vested interests” except the good of the country,a real patriot?
    Deco? David? anyone?

  21. Ahoy Ahoy ….hark the Duke of Wellington defeated Napoleon at Waterloo …..and……he was an Irishman by birth and …wait …he had Kerry Blood …Allez Les Blu ( les Kerry Blues )

  22. coldblow

    Here’s an excellent, if lengthy, article on the history of interest, debt etc by Hudson.


    The last 2 pages (14 and 15) are the most relevant here. One of his main points, I think, is that the current (misguided) notion that creditors can expect satisfaction no matter how high the debt burden rises is only a recent phenomenon.

  23. coldblow

    Here’s a few paras from the end. It was written in 2001.

    “Edward O. Wilson’s Consilience (New York: 1998:313) points out how impossible it is for the world’s financial savings to grow at compound interest ad infinitum. He cites “the arithmetical riddle of the lily pond. A lily pod is placed in a pond. Each day thereafter the pod and then all its descendants double. On the thirtieth day the pond is covered completely by lily pods, which can grow no more.” He then asks, “On which day was the pond half full and half empty? The twenty-ninth day.”
    By the time people feel obliged to argue over whether the financial glass if half empty or half full, we are on the brink of the Last Days. Growth in savings is simultaneously growth the economy’s debt overhead. As debts grow, less saving is recycled into tangible direct investment; more takes the form simply of paying off debt. The growth in credit (that is, debt) may be used to inflate the stock market and real estate bubble, but in the end it must shrink the economy precisely because it is “faux wealth,” “fictitious capital” that draws savings away from new direct investment in tangible capital formation.
    It trivializes the problem to say that a debt-ridden economy “owes the money to itself.” For a century, American farmers and industries in the western states owed debts to bankers and bondholders in the east. Today, the poor throughout the world, and increasingly business and government bodies as well, owe a rising proportion of their income to wealthy institutional creditors (including pension funds nominally owned by workers, for whom these retirement savings are not available to pay off their own current debts). At some point the trends of debt must rise so high as to exceed the economy’s ability to pay, namely, the entire available economic surplus. There is no inherently mathematical solution at this crisis point. The response must be political, as it always has been.
    Attempts to “restore equilibrium” by reducing wages and profits in indebted economies are counter-productive, in addition to being socially intolerable. Austerity aggravates the debt problem. Higher interest rates or taxes to pay creditors reduce the revenue available to invest in new productive capacity to enable the economy to “earn its way out of debt.” The market for output shrinks, making new direct investment less remunerative, leading yet more savings are invested in bonds and loans. Employment declines, wage levels stagnate and many families borrow money to make ends meet. Tax revenues fall, forcing governments to borrow to pay unemployment insurance and undertake counter-cyclical spending to make up part of the private sector’s slack. But matters are aggravated as rents fall and real estate prices decline. Property owners default on their mortgages, threatening the ability of the banking system’s loan portfolios to cover its deposit liabilities. The government is called upon to bail out savers (if not the banks themselves) by raising taxes or going deeper into debt by issuing more bonds, whose interest charges must be paid out of future tax levies.
    Some governments try to inflate their way out of debt by creating new money and credit, but such credit takes the form of yet more debt! Inflation pushes up interest rates, prompting businesses to borrow for shorter periods of time, hoping to refinance their loans when interest rates recede. This exacerbates the debt burden as more debt falls due each year. As loan maturities shorten, some companies and individuals default. Capital leaves the country as domestic and foreign investors jump ship. The exchange rate falls, making debts denominated in other currencies more expensive to service.
    In the end, debt cancellations are made inevitable. What is interesting to the economic historian is the degree to which the need for this resolution was perceived more readily over four thousand years ago in Sumer and Babylonia than is the case today. Part of the problem is that nearly all classes are now “savers” in one way or another, even indebted workers via their pension funds and Social Security. To wipe out debts is to annul the savings that are their counterpart.
    Whereas past financial crises wiped out savings along with the economy’s bad debts, matters have changed in today’s era of federal deposit insurance. Governments have increased taxes or borrowed to bail out savers (as the FSLIC did in the late 1980s, and as Japan has done since the late 1990s), in the belief that the value of savings can be guaranteed in perpetuity, even when they are reinvested each year to mount up at compound interest. Such public guarantees ultimately must yield to a realization that, in the end, the game must be given up as the debt overhead tends to exceed the means to pay.
    If debts rise beyond the economy’s ability to pay, then the savings that form their counterpart cannot be made good. Not only must governments default, as Adam Smith noted, but private-sector debtors also must default.”


    “States and municipalities become insolvent at the point where they are unable to raise taxes or borrow yet more money. To increase property taxes would induce abandonment. Indeed, as the debt burden grows and something has to give, it is not savings and their counterpart debts. Pressure mounts to cut real estate taxes so as to save the federal government from having to bail out banks that have invested their checking and savings deposits in mortgage loans collateralized by real estate that has fallen in price. The tax burden is shifted onto labor in the form of income and sales taxes, including value-added taxes. The economy shrinks all the more in a debt deflation, the modern version of incipient financial insolvency.”


    “What has not been agreed upon is what should be done when debt problems become economy-wide. Ancient rulers were not reluctant to cancel the most problematic, rural debts. Modern governments do nothing so straightforward, but as Adam Smith noted, they often “pretend” to pay their debt in the time-honored fashion of inflating their way out. Gesell’s variant of this approach would reduce the value of money steadily at a rate offsetting the rate of interest. However, his proposal dealt only with money itself. In his plan, prices themselves would not rise, but the bank notes or other monetary means of payment would have their face value reduced. Both the inflationary and “shrinking money” approaches would wipe out the value of savings as well as that of debt. But matters are just the reverse under today’s IMF-Washington Consensus. Economies are subjected to deflationary austerity programs that make the debt burden heavier rather than lighter.”


    “In the early centuries of public debt — that is, in medieval Europe — governments simply defaulted or repudiated their debts. This ruined the early Italian bankers; today it threatens the solvency of global banks and institutional investors. The political problem lies in the fact that to cancel debts involves canceling savings, as one party’s debt is the backing for another party’s saving. Today’s international diplomacy pressures governments not to declare bankruptcy, but to sell off their national patrimony and sacrifice their domestic economies to pay their creditors. Never before in history have private interests been placed so highly above those of government.
    All classical economists, including Marx, focused on profits as the economy’s motive force, but this has not turned out to be the case in recent decades. Seek profits involves risk, ties up capital, and requires entrepreneurial effort. It is easier, less risky and even minimizes taxes to lend out one’s savings to others to manage, collecting interest for the service of providing this wealth. What is remarkable is that unearned revenue is now being encouraged in preference to earned profit, above all in the form of asset-price inflation.
    Until quite recently, nobody dreamed that it might be possible to carry an exponentially rising debt burden by using loans to fuel a matching asset-price inflation. Speculative borrowing may be made remunerative (if not economically productive) buys control of real estate, common stocks, hard assets and other property (M-A-M’, with “A” standing for real estate, enterprises or financial claims on these assets). Such a strategy has been able to work for about a generation only because rent (including monopoly profits) were large enough to pay interest charges, while indebted governments have raised the money to pay their creditors by selling off the public domain, that is, the national patrimony historically used to provide society’s basic services at a price considered equitable and designed to promote long-term economic development. But this is not a process that enhances the power to produce goods and services. It is essentially sterile in terms of the classical definition of productive investment.”

    Interesting his ref. to the negative impact of any property tax on banks’ balance sheets, and also his ref. to selling off publicly owned assets as a last ditch attempt to stave off insolvency.

  24. Hi Folks,

    Breaking news this week re the 50% deterioration in the number of performing loans for Anglo flagged in IT, plus listening to Dukes explain the loss ‘due to the deterioration in the property market’ made me recall the number of times the LTEV value proposed by NAMA was flagged as bogus by critics of NAMA. I was highly amused(beats puking:) listening to Radio One, Today at 5, interview of Dukes to hear him say re the proposed second tranche of loans, in almost the same breath, that there would be no change to the discount on the loans handed over. Unfortunately, he wasn’t asked, ‘but surely, Mr Dukes, what’s sauce for the goose is sauce for the gander, if performing loans are under performing by 50% then the discount on the second tranche should be revised down? But you and I know, nod, nod, wink, wink sure the discount is only a mask for a barely disguised subsidy of the banks by NAMA.

    Dukes prattled on re his good bank/bad bank for Anglo. Busy with something else I heard the word ‘competition website’. I figure I’ve missed this, so off to the competition website to see if there’s a breaking news item pronouncement on Anglo I missed. I couldn’t find anything, but as often happens, when I lose something, the search finds something else of equal worth:


    Above is interesting, see Seanie on the list of directors. You see why he wants to avoid bankruptcy at all costs. He’s got many such irons in the fire that bankruptcy would compromise.

    Plus above re competition I’m wondering how €22 bn injection of state funding does not prevent Anglo from setting up a new bank that on competition grounds would be prevented from trading by the competition authority.

    I found the following: http://bit.ly/cxAw8o

    – Contribution by Ireland –
    1. Introduction
    1. This is the written submission from the Irish Competition Authority (“the Authority”) to the
    February 2009 OECD Competition Committee Roundtables on Competition and Financial Services. The submission considers the measures taken by the Irish Government to ensure the stability of the financial system in Ireland and the likely impact on the application of domestic competition law to the financial
    services sector.
    2. Legislation to Ensure Stability of the Irish Financial Sector
    2. Over the last few months, the Irish Government took steps, including the introduction of new legislation, to ensure the stability of the Irish financial system. In particular:
    - In October 2008, the Irish Government enacted The Credit Institutions (Financial Support) Act 2008 (the “Credit Institutions Act”). The Credit Institutions Act provides for a guarantee arrangement (the “guarantee scheme”) to safeguard all deposits and liabilities in the banks that
    have signed up to the guarantee scheme. In addition, the Credit Institutions Act enables the Minister of Finance (the “Minister”) to take jurisdiction over a merger or acquisition that he
    determines is required to ensure the stability of the Irish financial system.
    - The Irish Government also announced an intention to recapitalise certain banks that signed up to
    the guaranteed scheme.
    - In January 2009, Anglo Irish Bank (“Anglo”), the third major Irish bank, was nationalised. The Anglo Irish Bank Corporation Act 2009 (the “Anglo Act”), the emergency legislation that gave
    effect to the nationalisation of Anglo, specifically disapplies the Competition Act 2002 (the “Competition Act”) to the government’s nationalisation of Anglo.
    3. The Guarantee Scheme (The Credit Institutions Act)
    3. The guarantee scheme envisaged in the Credit Institutions Act was enacted by a separate statutory instrument passed by the Houses of the Oireachtas (the Irish Parliament) on 17 October 2008, the Credit Institutions (Financial Support) Scheme 2008. The guarantee scheme covers all existing and new deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II) with the institutions concerned1; this is valid to 29 September 2010″

    The bit I draw your attention to is not the credit guarantee about which we are very familiar, but the setting aside of the Competition Act:

    “the emergency legislation that gave effect to the nationalisation of Anglo, specifically disapplies the Competition Act 2002 (the “Competition Act”) to the government’s nationalisation of Anglo.”

    Its the two prong nationalisation plus the setting aside of the Competition Act that is the essence of banking in Ireland Inc, namely, socialisation of the banks.

    This is the setting aside of capitalism based on free and fair competition in favour of a new regime of Nicolae CeauÅŸescu nepotism and croneyism and distortion of the market place by NAMA and FF and Anglo bailout.

    Welcome to kowingCescu’s Ireland Inc. Agree with D, it cannot last. Just like the Berlin Wall, its going to fall. It has an upside down world at its heart with

    “Good things of day begin to droop and drowse,
    Whiles night’s black agents to their preys do rouse”

    Stay alert. folks, Shine a light on the dark bullshite, folks, and look forward to the day with Kowen, Kowing, Gone

    • Philip

      I wish the clowns with the “grave” reservations about plonking another 8.5 bn into this millstone were reading this. Or else we are missing an even more subtle trick.

      • Unfortunately, can’t give you the url to today’s Morning Ireland 2nd hour broadcast of interview with Brian Lenihan as its not up on RTE player yet. OT player is great, just download whatever podcast you need, play it locally on your pc, it has an excellent seek feature, just pull the button to the point you want to listen from.

        Back to the point. It was ironic to hear Lenihan say lots of criticism of NAMA was ill informed given the figures in his NAMA business plan were off 50% from the draft plan!!! It was priceless to hear him say the draft business plan was published in request to a member of the opposition, probably Joan Burton. See urls I’ve given above, its European Competition Authority forcing them to do this, otherwise we’d get no information whatsoever? OT, Deco and Apres Match slagging of Joan Burton which happens frequently on Pravda RTE, she does a fair job (I’m not a member of any party), on that clip Joan is depicted as unwilling/unable to propose any alternatives to Lenihans policies on NAMA. I heard her on radio yesterday say Anglo would be wound down and NAMA forced to sell of commercial foreign portfolio so money could be invested in jobs locally. She also drew attention to the remit of the banking inquiries which prevents them looking at the role of government of DofF in the meltdown. Also Lenihan/Cowen fueling of property bubble with tax breaks for all.

        Carl Whelan later in the progamme today’s Morning Ireland drew attention to the lack of detail in the NAMA business plan. OT its also ironic given O’Leary of Ryanair negative judgment by the european competition authority preventing Ryanair takeover of Aer Lingus that the government has been allowed to set aside rules on competition, see docs above, in its dealings with the banks.

        Back to the point above, Lenihan in the interview said NAMA did not believe the figures in the draft. (Here Lenihan puts on the hat of subtly casuistry) Nama only provided an estimate with the information it had on hand at the time. It was only when NAMA looked at the performing loans later that the true picture came out. So, we may have been fooled by the NAMA draft business plan, but NAMA wasn’t. Lol LOL LOL

        In a true jesuitical twist, Lenihan said they paid less for the loans than they were expected to pay. As yet, no one in the media has taken up my point that given the fact of being out by 50% re performing loans, then the other figures for non performing loans and their underlying assets based on Long Term Estimated Value should also be revised downward by 50%. OR to put it bluntly, taxpayers are overpaying for the loans by 100%

        Lenihan, and may I take this opportunity to wish him sincerely a speedy recovery, as worst Minister for Finance in Europe, following next election, should go back to law. Or, better still, with his experience in Finance, take a sabbatical, visit the US and join a program studying Finance and Economics. But I really wonder if he has the grey matter for this. ‘Stupid, as stupid does!’

        • Should be ‘Stupid is, as Stupid does’….(from movie, Forest Gump)

        • Deco

          It is hard to say if Lenihan is the worst Minister for Finance. His predecsor being often drunk at the wheel, and was even worse. Gordon Brown (similar career path to Cowen), left a wholescale disaster behind him. And then we have the Greeks, Spain, etc… Incidentally the current Greek PM is a great chum of Cowen.

          There is an acronym for countries that have property booms, consumption booms, borrowing, and where the politicians use the proceeds to overheat the economy to the point of creating massive debt levels (to buy votes). That acronym is
          STUPID (Spain, Turkey, UK, Portugal, Ireland, Dubai).

          Therefore, it is possible to say Lenihan is in the STUPID category of national finance minister.

          Would you ask a plumber to fix your car ?

          • Colin

            Who cares who is the worst Minister for Finance ever? What matters is now, and now we have Lenny, and Lenny is screwing up the country, and spinning Jesuitical lies, and the media think he’s wonderful, fantastic and heroic. Some media marvel at the way he has handled his brief, admiringly saying that “at least he took decisions”. These decisions he took have been proved to be completely wrong. If he had a decent bone in his body, he’d resign and apologise to the country for fcuking it up further!

          • Hi Deco, Colin,

            Agree ‘who cares on the stupid issue’? Re Spain, Portugal, Greece and the other PIIGS and the acronym stupid to include Dubai, let me point out none of those have a NAMA, mind numbingly idiotic in the extreme.

            But put in the context of croneyism/nepotism, holding onto power, taking over the banks and turning the economy into a Ceausescu socialist Republic, the markets in property now controlled/distorted by the state, and the takeover of Anglo with €22 bn of taxpayers money, with all the jobs ready to service this project ready for the cronies, that kind of criminality is not stupid.

            When I used the word ‘stupid’ it was not meant to say there’s not manipulation, intelligence there in the service of dark deeds. But insofar as the term ‘stupid’ does appear to let them off the hook for responsibility and accountability, for that reason, I’ll withdraw it. What’s happened to Ireland Inc needs darker metaphors.

    • Garry

      I’ll take them off you Fergal … Sure there worth nothing :) I’m good like that, always willing to do a friend a good turn

  25. Fergal73

    If the bank guarantee runs out, then a run on the banks will follow in short order.

    Does anyone know if Euro notes issued by the Irish banks contain information / serial numbers / markings that denote that they were printed in Ireland?

    I ask because I expect that ireland will leave the Euro, and if I cash out, then I wonder what currency / cash I should hold.

  26. Fergal – discard your notes with the letter – T -

    • Fergal73

      Thanks John Allen. Garry, they’re not worthless yet. They might suffer a dramatic fall in value if you wake up in the morning to hear that Ireland has left the Euro and that we’re moving to a New Irish Pound.

      The answer has to be to get the money out of the Irish banks and not held in Irish serial number Euro notes…

  27. nono

    You can find the country of origin by looking at the table in that link (scroll down) http://en.wikipedia.org/wiki/Euro_banknotes

  28. Deco

    On the IT website yesterday, an article commented that that “Baron Rathcoole” is in serious financial trouble. His demesne was frequented by the well-to-do and the infleuntial. This resulted in a rumour mill. I am not saying anything libellous. The empire was a success story of the era 1987-2007. It was typical of the type of empire that ascended through the rich list in Irish newspapers in the era.

    To be honest, I am really amazed that somebody could control so much property, in an excellent location, develop it heavily, generating massive cash flow, with heavy large margins, and that we are now supposed to beleive that in the long run, it lost money. I can understand short run difficulties. But over the long term, this does not make any sense. I am really suspicious about this sort of sudden bankruptcy. The will be a process whereby creditors will be chasing the debtor, and trying to seize assets. We are about to see that Irish Company law is very porous when it comes to getting debts repaid, with the exception of bank liens.

    In fact, I am suspicious of some of these bankruptcies being nothing more than damage limitation exercises. This is important for our democracies. If property speculators/magnates manage to siphon off millions for later, then this money will be recirculated back in at some stage. And suffice to say it will not be invested in hi-tech start ups, or anything to do with the knowledge economy.

  29. Deco

    I don’t know what to make of this.

    Officially we are all supposed to be tightening our belts. And now, the ESB decides that it is an appropriate time for some territorial expansion. Probably as a pretext to controlling the market for electricity for a long time to come. This is not a pro-jobs announcement. This is a pro-insider/oligopolist announement. And those announcements are always anti-jobs.

    The timing of the announcement, the day after the government managed to prevent RyanAir from taking over Aer Lingus is even more hilarious. I expect Michael O’Leary to be making commentary on this, because the FF/GP coalition have really left themselves open over this.

    Is this an attempt to monopolize Ireland’s electricity market even further. It certainly looks like it. Why is the ESB getting so much leverage in investing in areas where it should not, like car retailing, and buying infrastructure in the North.

    Oh yeah, and here is the real sting in the tail
    The deal still has to be cleared by both Irish and British competition authorities, but it is expected to be complete by the end of this year.

    I knew that the Irish Competition Authority was a sop to IBEC (which is a lobbying body for oligopolists in Ireland), but the Brits have a more serious reputation in respect of competition policy.

    I bet this makes all of you proud that we pay the second most expensive electricity in Europe, and the wind is blowing overhead, but cannot be commercially exploited by local co-operatives because of the ridiculous tariff system operated by Eirgrid. Another stitch up of competition in progress. If Michael O’Leary really wanted to have fun, with the Irish authorities, he could launch a case against the ESB, all the way to Europe to embarass the cronyism that is rampant here. Or he could provide an equity boost to an aggressive competitor.

  30. Tull McAdoo

    How about this for a pantomime then folks???? I give you the Laurel and Hardy of the property world in Ireland….. Daly and mcDonagh of Nama fame. (see link below). Before we get to “ this is another fine mess you’ve gotten us into “ let me remind ye of what that other great comedian of Merrion St. Mr. Lenny himself had to say back on the 19th Nov. 2008 just after the guarantee, and I quote…

    “ We are not rushing into the banks like some governments in other countries without knowing precisely what the position is in those banks,”
    Brian Lenihan, the Lawyer who didn’t read the fine print of the PWC report.
    Thurs 19th Nov 2008. “

    Laurel and Hardy are “disturbed” I’m fit to be bloody tied.

    • Tull McAdoo

      p.s. By the way Daly makes it quite clear that “they dont do sentiment in Nama” just in case any of ye were thinking of booking these overpaid clowns for some anniversary parties. I wonder how long before he has to change that sentiment…..

      • If these Don Quixote coyotes were selling cars instead of NAMA donkeys,would you even buy a car wreck off them? http://bit.ly/cz3IE9 Bank shares drop. The irony is Lenny is blaming the banks for giving out misleading information. He doesn’t get it, the buck stops with him but nobody in Ireland Inc seems to follow that axiom. NAMA is damaged below the water line, the fantasy of investing in sterile property, commercial and otherwise, with the market refusing to buy it, because its gone sour as an investment, was described as a lossmaker for the taxpayer by NAMA critics from the outset. The market for commercial and residential property will plunge further making incremental increasing losses for NAMA. But this is all posturing for the European competition authority to get their NAMA business plan passed. Quelle Surprise from the Lenny scam gang? Don’t believe a word of it. 2nd tranche to be €13 bn of taxpayers money!!!

        Here’s the plan http://bit.ly/aow82E

        • Just had time to take a brief look at the plan. I was interested to know when/how/methods the assets would be offloaded onto the market place to bring back the projected returns. Nothing in there about that I could find. In that respect its a pig in a poke. Ye may be interested in these quotes:

          “It will acquire about €81 billion in eligible assets from five participating institutions — AIB, Anglo, Bank of Ireland, Irish Nationwide Building Society and EBS.

          The loans acquired will be the performing and non-performing loans of debtors with significant exposure to the property sector. NAMA has begun to acquire loan assets: the ten largest systemic exposures, which aggregate to €15.3 billion, were transferred as part of the first tranche in March-May 2010.

          The loans were acquired at a consideration of €7.7 billion, a discount of 50% on the nominal amounts transferred – this represented a discount of 7.5% on the long-term economic value of the property and an uplift of 3.2% on the current market value of property securing loans. It is expected that about half of the overall loan transfer will have been completed by August 2010 and the remaining loans will be acquired no later than end February 2011. Tranche 1 data is used as the basis for computing financial projections in this Plan.


          The fees that NAMA will pay over its expected ten-year life amount to about €1.6 billion.

          A breakdown of the 2011 budget shows that a significant proportion of these fees will be incurred as payment to the participating institutions to administer loan assets on NAMA’s behalf. It is likely that there will also be significant fees
          incurred arising from enforcement.


          NAMA will manage the largest 100 debtors (€50 billion) directly and will delegate the management of another 1,400 debtors (€31 billion), within tight and specific authority limits approved by the Board, to the participating institutions which will act as primary servicers.

          - Section 50 of the Act provides for a limit of €5 billion on the amount of funds that NAMA can borrow for purposes other than the payment of consideration for acquired bank assets. However, the limit can be adjusted by order of the Minister and Resolution of the Dáil, thus ensuring parliamentary accountability for
          borrowing levels.”

          Yes, folks, if ye had anything remotely to do with property, run down to NAMA, there’s €1.6 billion available for you.

          Err, forget the 50% discount LTV above in the plans, I’m sure they’ll knock off another 20-39% on top of that to help your profit margin. When yu’r down there mention your a friend of Lenny and for feck’s sake, if you havn’t already done so, get down fast to join the local cumainn!

          • And just when I persuaded myself NAMA was about bricks and mortar and not paper transactions based on derivatives

            “Derivative transactions with a nominal value of €14bn (principally interest rate swaps) will also be transferred. A substantial number of these derivatives are nonperforming
            and NAMA will pay nil consideration to acquire them.”

            “The eligible assets will be valued in line with a valuation methodology which has been approved by the EU Commission. Assets are evaluated using a discounted cash flow method taking into account the timing and reliability of the cash flows coupled with an appropriate discount factor to arrive at a current valuation. The discount factors are set out in the Valuation Regulations published by the Minister on 5th March 2010. The ultimate aim of such a cash flow valuation exercise is to determine the long-term economic value of the eligible bank asset which is defined as “the value that such asset (i.e. the loan) can reasonably be expected to obtain in a stable financial system when the crisis conditions prevailing are ameliorated”. The transfer price of the assets will be no greater than the long-term economic value of the bank asset, so determined. The underlying property and other collateral is valued by professional valuers.”

            I wonder why they don’t state which bank responsible? Was it some night in 2008, was it Iznop Einaes, burned by the prospect of the balance sheet going awry with imminent meltdown, did he do the trades that led to this € 14bn loss.

            ComeOn Inquiry, give us the blow by blow lowdown on the derivative trade? Who made the trades, when were the losses made? There’s no end to the Anglo/NAMA mess is there. Everytime you look at it, it gets worse.

    • coldblow

      And I see they have scaled down the forecast profit from 4.8bn to 1bn, with possibly a 0.8bn loss in the “worst case scenario”. And there was me anticipating losses in tens of billions.

      A prediction: Nama have as much chance of making a profit as Argentina now have of winning the 2010 World Cup. Maybe that’s a bit rash. We’d only need hyper inflation (and a Nama/Junta coup in FIFA).

      • @Coldblow don’t be fooled by “worst case scenario”, that’s misleading information/propaganda. In simple mathematical terms, here’s how they do that trick. They flag discount at LTV(Loan to value ratio) of 50% and use this to benchmark profit and loss scenarios within a variance of 10%, so +10% off their figures gives one result, -10% off give another, this they claim is “worst case scenario”.

        Do’h No! Worst case scenario is a lot worse. These include scenarios such as 10%, 25%, 30% with proportionally increasing losses for the taxpayer.

        Plus they’ve already had to adjust downward the valuations of performing loans. That is, without any flooding of the market with NAMA commercial/residential property, without a further economic downturn, increasing unemployment etc. But not to worry, this is where the NAMA casino mentality kicks in. And they love casinos.

        Meanwhile the gombeens have the €1.5bn and the taxpayer ripe for more rip offs….

        • coldblow

          Like, I am sure, other visitors to this drop-in centre for the bewildered it’s easy to go astray in a fog of mental confusion and disorientation. When I said tens of billions I was for a moment mixing up Nama as such with the wider bank bailout scenario involving the recapitalizinig of Anglo etc. But it isn’t even clear if they intend pursuing the full value of the loans, as opposed to merely looking for the discounted value they have been/ will be acquired for, not that that really matters anyway as I imagine the developers have already salted away whatever assets they have (offshore, in the wife’s name, family homes, labyrinthine investment vehicles etc). And then of course the paperwork wasn’t always done properly so there might not be any tangible assets behind these loans, and even if there were their value has collapsed. Then there’s the bank bailout making the general economic situation worse which in turn will further impact on the value of the loans. Etc. So it could be multi-billions for Nama plus all the rest.

          We’ve all been down that road.

          Now, starting from the reasonable principle that debt that can’t be paid won’t be paid, when the great Clean Slate comes to pass how do you see it working out? (Assuming massive inflation doesn’t do the job, and that’s not on the horizon yet.) I can’t see it being done equitably in this country as the same people will be arranging this who got us into the mess in the first place. And we’ll only do it once the US and Europe first take the lead, so our gaimbíní will just plead the excuse that they have to follow suit…

          Brian Lucey was on the radio this morning saying that we need transparency over Nama. He said that we are as a people prone to look for conspiracy whereas cock-up is more likely. I would have agreed with this once, but not any more.

          • I don’t believe you’ve gone astray at all with the possible projection of losses in the tens of billions for NAMA. BTW thanks for your earlier Hudson link though things with internet fraud/globalization have moved on, great background link. Maybe your own bewilderment including my own will generate a compound interest in understanding if enough people continue to post valuable information here on this site.

  31. Peter Atkinson

    I just heard the minister mention a new committee, the VFM (Value For Money) in relation to the cutbacks on respite services.I was going to suggest the SFA( Sweet F**k All) committe but I just realised we already have one established (Small Firms Association).We should all be ashamed of ourselves.Only a mention of asylum seekers being relocated and they were up in arms and protesting.It has taken asylum seekers to lead the way in this country.We are a pathetic bunch of self serving idiots.Its coming down to the wire folks.Lies,damn lies and statistics.What will it take for the fools on the hill to come down off horseback.Oops sorry that was the stag hunt.Something important.Even the opposition admit NAMA is too far gone to do anything about so we have given them carte blanche to do what they like when they seize power.And seize it they will.Our only hope now is that the Allied Forces will invade us,overthrow our regime, install their own and train our monkeys to take orders.Again sorry, that happened back in the 90s when the multinationals moved in, conspired with the same Fianna Fail junta, offered ridiculous tax breaks in the IFSC and exploited cheap labour and repatriated profits.Same shit, different arsehole.

    ps just heard Jabba the Hud (Cowen) caved in on the respite cuts.Again I rest my case.PROTEST and be heard.Get off your
    arse and get on the streets.

  32. Commission of investigation costing €1.8 million into banking by international experts extends to 15th Jan, 2009 to cover when nationalisation of Anglo happened. No examination of the role of DofF from 2003 on, or minister of Finance particularly Cowen in that period. Dail committee on Finance to look at lessons to be learned. There’ll be about 5 inquiries in total. The lies told by the banks since then, see the NAMA figures, plus all the insider/political appointees since then, won’t be examined, taxpayers on the hook, back to business as usual. What will not be examined will be the Swedish model of temporary takeover of the banks, selling of property by firesale over a 5 year period, because we didn’t do this. What won’t be examined is the consequential impact of the decision to pour €22 bn into Anglo plus the NAMA project over a 7-10 year period. This examination will be left to future historians and debt boa constrictors that will slowly unravel consequences for Irish taxpayers and the Irish economy over the coming years.

    • Malcolm McClure

      cbweb said: “This examination will be left to future historians and debt boa constrictors that will slowly unravel consequences for Irish taxpayers and the Irish economy over the coming years.”

      Let’s all pause for a moment and say “Hi!” to the future PhD candidate historian who, in about 2070, is given the task of analysing NAMA’s consequences for Ireland.

      Imagine the initial interview with his supervisor in a world with free energy and virtual reality wall to wall everything, with hydroponic food piped directly to the stomach:
      “Welcome on board Clarence. It’s now about 70 years since the start of Ireland’s classical catastrophic boom. Some of our leading economists are predicting that our present boom will end in a disaster that will make Ireland’s look like a spill in the playground.
      Your PhD task, Clarence, should you accept it, will be to analyse the Irish experience in the Noughties and their response with ludicrous NAMA legislation that resulted in utter chaos in Irish society and ultimate regression to cannibalism.
      I’d suggest that you might start understanding the context by reading the David McWilliams’ blog from about 2006 onwards as there were a few contributors there who seemed to understand the dangers, whilst everyone else was making whoopee.”

      • Malcolm, “Confessions Of An Economic Hit Man”, John Perkins arrived today, look forward to the read. Clarence makes me think of ‘The Clarence’ and why Dennis O Brien, Bono et al have taken their tax affairs offshore..they’ve been tipped off and won’t be stuck for the bill. From 300 lol:) http://bit.ly/9tSqxt Will taxpayer serfs be able to afford PhD’s in Ireland, or want to attend Irish universities if they’re austericised? I’m sure Clarence will not be looking at the role of Kowing and Lenny and DofF in our debacle as part of his PhD; as we know, they are as incapable of error as the 9000, http://bit.ly/9HohwJ …Humour helps.

  33. Deco

    And now Micheal O’Leary is having a go at NAMA as well, in an indirect manner. Well, for a few years there he was the only opposition that Dithering Bertie ever faced.


    Ryanair chief executive Michael O’Leary said Terminal 2 was the “most perfect example” of Ireland’s recent property bubble.

    “It is badly designed, badly located, massively oversized and effectively bankrupt,” he claimed.
    He left out that it came as a result of government planning, and cheap interest rates.

    NAMA is now Ireland’s home for white elephants.

    Strange, but there was a bull market in white elephants for fifteen years, and nobody knew it. Fifteen years to a destination – and that destination was bankruptcy. But rather than face up to it, Cowen wants us to beleive in the ‘recovery in the second half of 2010′.

  34. wills

    cbweb, thanks for links, appreciate it.

  35. Deco

    Hilarious. Absolutely hilarious. Who would have thought it. The Bank of Ireland, is reduced to paying a professional gambler on it’s board of dirctors.


    What ever happened to hiring your chums from the golf circuit or who played alongside you three decades previous, on the college rugger team ??

    Even the BoI are slowly moving towards meritocracy…..

  36. coldblow

    Seeing as the Dáil is now taking a break here’s an amusing recent piece from John Drennan. (I tried posting this before, dunno where it ended up.)


  37. coldblow

    Gurdgiev’s latest on Nama:


    “All of this means that my estimated loss for Nama of €14.6bn is extremely conservative…”

  38. Malcolm McClure

    Its a pity we can’t trust John O’Donoghue, because he delivered the most finely tuned piece of invective yesterday that the Dail has heard in many a year. Mere quotation doesn’t do it justice. As befits the ex-Speaker, his delivery was worthy of Mac Liammoir and it was repeated on Newstalk this morning.

    “Deputy Gilmore, if I may be excused the analogy, reminds me of a gadfly around the tail of an old cow,” Mr O’Donoghue said. “He circles, you don’t hear him; sometimes he might land but you don’t see him land; but all the time you know he is there and you know that in the final analysis you will never quite know what he is up to, where he is going, or how he is going to get there.

    “That appears to be a very popular stance to take in modern-day Irish politics. But let me say this: it amounts to tut-tuttism by the finest tut-tutterer in the House. And I’m sure of this: a man who stands for nothing will, in the final analysis, fall for anything.”

    Read more: http://www.examiner.ie/ireland/politics/odonoghue-takes-belated-revenge-on-gadfly-gilmore-124581.html#ixzz0tAkV4q4z

    • Speaking of cows, O’Donoghue is an expert having milked the public purse for so long on first class expenses that flew himself and the wife around the world for so long as Lord and Lady Muck until he was thrown out of office in disgrace. Expect more of this from FF as they target the recent polls success of LP. Note Pravda RTE accuse LP of standing for nothing. Reality is they have no airtime to speak with the same reportage as FF with above comments will get. In particular, LP stance on the banks and dealing with the financial crisis on e.g Swedish model was silenced by Pravda RTE while FF propaganda managed to sell itself as the only game in town. Once again, I point out I’m not a LP member but I do recognise against fierce opposition LP made a fair effort to oppose the NAMA crazies and I believe the public are beginning to see this as well.

    • Deco

      I find Johnny Cash’s quotation
      {…a man who stands for nothing will, in the final analysis, fall for anything… } hilarious.

      It perfectly describes his pal, the Drumcondra Ditherer….

  39. coldblow

    Hudson’s latest:


    He makes the following points:

    1 In devaluing we know that foreign currency loans remain to be paid – Hudson contends that sov. states have the option to “re-denominate all debts in domestic currency by abolishing the ‘foreign currency’ clause, much as President Roosevelt abolished the ‘gold clause’ in U.S. bank contracts in 1933. This would pass the bad-loan problem on to the Swedish, Austrian and other foreign banks that have made the loans now going bad.”

    2 Very deep austerity cuts in the Baltic states are leading to a collapse in tax revenue.

    3 “… instead of running the banking system for the economy, Latvia and other post-Soviet economies are managing their economies to maintain bank solvency” (sounds familiar)

    4 The burden of tax should shift from labour (where it currently falls) onto land, financial wealth and economic rent (at present barely taxed). This would boost employment and also reduce property prices. (cf Crotty for Ireland)

    5 Latvia has a coalition of parties pushing for 4.

    It makes for interesting comparisons with Ireland.

    • Not that I’d disagree with Hudson on a shift of the burden for debt repayment onto the shoulders of the rich via rental taxes on property land, capital, But I’d go further.

      In doing the above, I’d also default on bondholder loans to Germany, Switzerland and France or wherever else.

      Reason being these bondholders in hoovering up capital via debt reparations, everything the poor taxpayers have to offer, now target the so-called rich to suck every sheckel into the black hole of debt reparations, thus damaging society even further.

      This is the policy of Ebenezer Scrooge. The few families in the world today who own most of the wealth would seem to be by their present policies to be proponents of the philosophy of the great Ebenezer himself, Thomas Malthus.

      This needs to be confronted and exposed. I say, declare bankruptcy, introduce agreements based on automatic bankruptcy of an economy, followed by debt renegotiation based only on ABILITY TO PAY.

      No economy should be saddled with debt so great it can never pay it back.

      Let’s have the Grand Debt Renegotiation. Debt only allowed based on ‘reasonable’ ability to pay back and fair distribution in society of debt burden. Of course this is going to involve default on debt that can’t be paid back.

      But, hey Dude, who lent money out to banks and economies that can’t pay it back? Let those who did, including Mr Trichet’s ECB, face the consequences of broken laws of fiduciary responsibility that perhaps this will improve lending practices in the future.

      Its only dumb ass economies and Governments such as our own who won’t face the inevitable, corrupted by the allure of holding onto power, say they can manage debt on the scale of ours and continue to extract the mean pence from its citizens to the level they believe they can endure.


  40. Even Pravda RTE getting worried about NAMA, our biggest white elephant did the first of its poo poos on us this week! Lots more to come.


    Lenny “We are satisfied Nama can start off on a profit making basis. The taxpayer will not be at a loss over time.”

    In a parallel universe the nationalisation of the banks has led to the winding up of ANGLO with a fraud team building a case that will shortly come before the High Court. Seanie Fitzpatrick says he will defend the case rigorously. AIB/BOI merged with some other banks have been sold to bidders from Canada and the Netherlands and have had transferred to them the deposit book of Anglo. Default has meant a renegotiation of our debt with bondholders and austerity measures mean cutbacks across the board. The new coalition has made changes to taxation policy with high earners paying a significantly greater portion than before. Similarly, across the Public service wage cuts to higher earners have been deep but redundancies are avoided at all costs. The number of TD’s has been cut in half with similar cutbacks in salaries. NED’s and quangos are gone. The Public service has been mandated to develop its own expertise from within its own ranks. Universal health care similar to France is being introduced. Both Kowing and Lenny have left politics and are believed to be fronting a car dealership in Spain with Lenny claiming he could sell anything to anyone though he regrets his socialism of the banks promotion which he put to the people in a referendum in early 2009 and lost. A firesale of properties owned by the banks is ongoing. Each of the major banks have independently hired their own property/estate agency/auctioneers to offload the portfolio. There has been tremendous interest in the firesales from abroad following extensive marketing across the diaspora. Many hotels have been reappointed for dual use as retirement homes, schools, colleges. Bondholders and international markets following some turbulence have settled into support for the new deal for Ireland INC. International investment has begun to surge driven by an influx of support for Ireland’s educational system which is being revamped with a major investment into science, mathematics, engineering and medicine involving the twinning of schools and colleges in Ireland with institutes of learning with large reputations in the USA and Europe and greater liaison with indigenous industry/business. Even the IMF have contributed a large infrastructural development loan stating the Netherlands will not leave Ireland behind, and every Irish person has a right of access to at least a one mb broadband connection from their own home.

    Then I woke up….lol

  41. Wallets Full of Blood: Roscommon Death Trip

    Rain falls on the snow. The Contagion has taken hold. Ghosts from the old Dead Republic are emerging everywhere as the day of judgement approaches.

    On Black Tuesday a guilt ridden political functionary runs from his job burying bodies in the city. He is tortured by voices of reproach as he journeys towards home. He recounts the history of his dealings with Fingers – a boss ‘who made the old boss look like Mother Teresa’.

    Meanwhile, back in the city, amid the spiraling negativity, Fingers and his acolytes lay the foundations for a new Easter Rising.

    ‘Roscommon Death Trip’ is the final installment of the ‘Wallets Full of Blood’ trilogy. The previous installments were ‘Houses on the Moon’ (2009): http://www.vimeo.com/3269259 and ‘Zombie Banker Blues’ (2009): http://www.vimeo.com/4292136

    • Liek the videos, sound overlay I’d love to get your sources and how you put them together, video locations/scenes could have more movement and depth and interest, but who am I to say.

      Great the THEY are going on holidays where hopefully there more out of harms way. Agree with Michael O Leary on his useless summation of Government.

      Yes, we’re fu’ked. We need less bureaucracy and Government. Instead, we got NAMA, Government gone mad, no transparency, no accountability, no responsibility. Suggest Kowing pay a visit to Putin to learn how to run an organisation like NAMA, such as the KGB. We’ve been baNama’d.

      We need less government, a more efficient one. E.G. Singapore without the benign dictatorship element, we should look at political reform. Singapore where members of Parliament (MPs) consist of elected, non-constituency and nominated Members. The majority of MPs are elected to Parliament at a General Election on a first-past-the-post basis and represent either Single Member or Group Representation Constituencies (GRCs).

      We badly need people of the calibre of O’Leary in government. Non-constituency TD’s could elect a portion in a nationwide poll that wouldn’t be hobbled by the need for parish pump politics alone. E.G. judges with a good record, background and knowledge of legal matters could be added to a list system and voters would vote for people from their constituencies and from such a list. The winning party on the Singapore model could be afforded the opportunity to appoint a certain number of individuals outside politics to positions/ministers TD’s based on their expertise alone.

      The idiotic is the currency and language of communication and has replaced reason.

      Government has completely failed here on banama Ireland Inc.

      More zombie videos please.

  42. liam

    Skin says: “What will happen WHEN we default?”

    Just corrected that for you there.

    This is a whole new world of strange. My understanding is thus: ‘we default’ means we don’t pay back the German and French, Swiss and UK banks that have been “pumping money in to Ireland through a fire-hose” for the last ten years, as one poster here put it (I can’t remember whom, sorry).

    I would be gratified if anybody else with real knowledge could illuminate the situation further, but it seems to me that this is all about protecting the savings and pensions of French and German citizens, by using Irish tax income to cover the idiocy of their banks and fund managers over the long term. I imagine the Germans etc would see this as equitable comeback for funding our roads, trains and HEI’s for the last twenty years.

    Somebody is going to mention Goldman Sachs/PWC/Ernst et Young etc etc, I am sure of it. As I see it, auditors are like a shady garage selling NCT certificates to people driving bangers. A process failure that is a consequence of zero regulation.

    In my mind, its not really about Ireland and the Irish banks, and more about the original sources of (the bulk of the) credit at the center of the Eurozone. FF is a major back-stop against anything being done about this, but an incoming Govt would also essentially have to adopt a policy that puts German taxpayers at risk, and who knows where that would lead. Not that we should be afraid of that, for the status quo is far more ominous, but I don’t see a single Party nor a single TD who would take (or be capable of taking) that bast’d on.

    Who runs this f@*kin’ country anyway?

    I’ve tried to remain positive but I also have to be a realist, hence the sparsity of my comments of late, as I would rather say nothing than moan. But I am sorry to have to report:


    Re-calibrate to that reality and expect nothing else and you will be much happier, if not richer.

    • liam

      On the positive side, here’s a lovely article from Ken Rockwell. The context of the article is photography, but the message is universal.


    • gquinn

      Wel done Liam. You now see the truth.

      The truth being that if we need to get something done properly then we all need to become more aggressive because if we come across as being nice then the politicans will deflect it with spin and lies. No more of this crap is what I’m saying and everyone needs to unite on this.

      Last week, I was over in Dublin for a visit and I spent an hour in my local TDs office giving out to him and letting him know of my feelings. I urge everyone to do the same thing and now is the time to start acting before the country is complrtly fucked and it’s at a point where the country is literally hooked into Germany.

  43. Dublin – Thursday last was the first time I was in Dublin this year .I have never been away from the capital so long .I was surprised at how quiet the center of the city is and that included Stephens Green Shopping Center -( almost ghostlike ) , very little road traffic , Iris Oifigiuil Office was absolutely EMPTY and Silent, and Coffee Shops – many will have to close soon.

  44. Returning on the 7pm train it was jam packed so I was left with no option but to stand near the exit door , until an Indian family arrived with three children and an au pair all speaking urdu and those kids were in their terrible twos .I decided to move down the train only to find more were in similar situations as me, standing only.I went again further down the train to the end where the shop was and that was full with people buying food .I noticed in the shop area there were no railings to support you while standing and no stand up seating .I am use to the TGV’s in France and these are a normal part of the safety procedures on their trains.I wondered do the Insurers of this Trainline know about this because if they did they would insist otherwise.I thought that the rail carrier was in breach of contract of service by allowing me on an over booked and dangerous train.I braved down further to the next carriage only to find it was the first class and empty except for three men and in my mind it was safer to sit there than risk my life .
    I found a window seat and it all seemed just a dream until……I was told ‘that would be a €20 upgrade charge’ by a bald headed eagle who was ready for a wrestle.I protested in vain.I decided not to pay it and reminded myself I want to live with normal Irish people .As I left I noticed that two of the the other three other passengers in first class were bankers with lap tops and from Cork and the third was a well known Kerry TD who glanced at me over his glasses as though I was an intruder .I reminded myself that he is on a three month holiday now while the country languishes in hell.

    I returned to the shop listening to the Polish workers .
    Dyen Kooyah.

    • gquinn

      and more importantly John is that Kerry TD is probably claiming that first class ticket as an expense so you the taxpayer are subsidising his travel in First class will people like yourself (The voters) get to stay standing up in a lower class.

      The way it should be for a Communist country.

    • The white elephant of Terminal 2 did not anticipate the economic dive bomber Kowing knocking those plans out of kilter. The superhighway roads could have been scaled back vis a vis the same downturn plus the fossil fuels debacle.

      A Silver bullet train service between the major cities, or even a decent upgrade of the present service with new rolling stock, now that would have been useful.

      I wonder why that wasn’t tried? Aha, got it, unless the idea is sufficiently useless and corrupt, it doesn’t stand a chance.

      Keep smiling!

  45. philo

    David McWilliams is a very smart man. And as this like so many other recessions will come and go David will continue to do very well selling books, doing plays and giving after diner speeches. This is not an attack just stating fact. David is great at pointing out faults and presenting solutions.

    Let’s default on the debt. But what then? When we look at the complexity of the system and the position that the country and households find themselves in we continue to play our part in the greatest fraud perpetrated on mankind by an elite few, to quote John Kenneth Galbraith The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.

    What David and many other commentators fail to point out (in most cases through ignorance) is the inherit fault which by design will keep you and me our children and every other future generation and that of every nation in debt to a private cartel as long as this system stays in place. The sad fact is that what people need to know doesn’t need book after book, video after video, websites full of articles after articles. To quote Henry Ford “It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

    Ask yourself the following:

    Where does money come from?
    Why has nearly every nation on the planet got a national debt?
    Who are they in debt to?
    Why if every debt on the planet was paid would they be no money in circulation?

    In closing I would ask people to take the power back, go and do your own research, bring it back to the basics.



  46. Consider the Parity pact http://bit.ly/a7poT1 and the ‘European drive’ to have greater fairness in society, a more equal distribution of wealth and opportunity.

    Consider also the drive from peripheral European nations, the PIIGS, to have a greater say in the development of Europe, perhaps even to demand more funding, more representation, more commissioners, more neutrality, more instability?

    Such measures come at a cost, arguably borne by Europe’s stronger nations whose banks currently are the bondholders of the periphery.

    Consider making large loans available to the periphery. Loans they cannot pay back.

    Enslavement through debt, Job done, no more worries from them!! Forget Parity, they’re lucky to be at the same table, debt serfs are there to serf the game, not play it! Game over.

    The game can be fine tuned by keeping the serfs on just about enough life support to enable them to pay back, rather than dying. It helps if you can keep the croney elite in power by encouraging them to keep giving positive messages about their fiscal situation….

  47. LdvLon

    If Uruguay defaulted in 2002, it was a technical default. All debtors ended up getting their money back, plus interest. If I remember correctly, it was more of a “voluntary rescheduling” (i.e. sorry, I can’t pay now, as I haven’t got the money).

    If Ireland enters into default without the intention of ever paying its debts (plus interest), it won’t be forgotten a few years later.

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