August 30, 2010

The reality finally hits home

Posted in Banks · 128 comments ·
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‘You want it to be one way.”

‘‘Man, stop.”

“[But] it’s the other way.”

The above dialogue occurs in season four of The Wire – the HBO crime series based in Baltimore, Maryland. Marlo Stanfield, a notoriously vicious drug dealer, walks into what Americans call a convenience store.

Straight in front of the security guard, he pays for his cigarettes but steals a lollipop.

The security guard confronts him as if to say, what the hell are you doing right in front of my nose?

The security guard explains to him that he knows who Stanfield is and how dangerous he is but even so, Marlo can’t just steal stuff – it’s against all the rules, that’s not the way the world works.

Stanfield just looks him in the eye and repeats three times,’ ‘You want it to be one way’’.

By this he means that life is based on facts, not on wishful thinking.

The reality is that life is not like that.

Wishful thinking is not how the world works, irrespective of what the guard might want.

This exchange – and, in particular, the difference between the reality of the world for a mean-assed drug dealer and the reality of the world for a security guard working on a Sunday morning to support a family – reminds me of the difference between the harsh financial reality of the markets – which are losing faith in Ireland – and the wishful thinking of Ireland’s politicians and senior civil servants who are telling the world that everything is under control.

Everything is not under control; in fact everything is spinning out of control.

The Financial Times carried an editorial last Friday which echoes what this column has been saying for the past year: the time has come for a forced debt-equity swap in the Irish banks.

The more the government keeps writing cheques for the banks, the worse our credit rating will get and the higher the price for the economy in terms of austerity.

It is good to see that the Financial Times has finally woken up to what is going on here.

The main reason is that the government and its advisers are so chronically insecure that a word, even an utterance of support, from the Financial Times and they are screaming all over the airwaves that the rest of the world thinks they are doing a great job.

This overblown reverence for what the FT thinks touches an insecurity which runs deep in the Irish psyche. It’s a case of ‘‘what will the neighbours think?”.

The corollary is also true, which is that, if the FT doesn’t like what the Irish government is doing, the Irish government sits up and listens.

This attitude – possibly a post-colonial hang-up – governs much of what goes for thinking in the upper echelons of the Irish civil service.

It reminds me of my granny’s ‘‘good room’’.

My granny had a good room, which was so good I wasn’t good enough to go into it.

In fact, the only people who were good enough to go into the good room were people my granny was trying to impress.

But the funny thing was we pretended that we used the china in the good room everyday when such guests knew full well that the good room was opened only for special occasions.

But the insecurity that bred the good room was precisely the type of insecurity which is much more concerned with what the neighbours think than being concerned about the real facts.

This is why it is so important that the FT has come out and said ‘‘enough’’, because one editorial from the Financial Times will have more impact on our top civil servants (who run the place) than 10, 000 or possibly even 100,000 people on the streets.

The other reason the FT piece is so important is that it addresses Marlo Stanfield’s point, which is the difference between what is and what is hoped to be.

The Irish state has been living in a make believe world for the past two years, writing cheques with money it doesn’t have to save banks and bank credit it doesn’t need.

The behaviour has been most bizarre.

For example, Brian Cowen talks about coming up with billions of euro as if the money is just stashed under the mattress or in a tin above the telly, which he’ll just go and get after his tea.

The cavalier attitude has been almost farcical.

More farcical still has been the willingness of foreigners to go along with this charade and swallow this spin.

At last, the penny has dropped.

Finally, the world is beginning to realise that we don’t have any money and if we did, the smartest thing to do would not be to give that cash to banks’ creditors.

This realisation is the reason we are being downgraded by the ratings agencies and this is why the bond market will close on us.

This is why the ECB is buying our debt, because no one else will, and yet all the while, the Irish top brass claim nothing is wrong.

They haven’t twigged Marlo Stanfield’s point either.

The world is not how they’d like it to be – it is as it is.

And this means that there is no more cheap money for Ireland as long as it is using that money to bail out creditors.

Even the Financial Times now gets it and is calling for a forced debt for equity swap, where creditors take a hit.

The best course of action now is to let the guarantee lapse, force the creditors into the room and tell them this is the way it is going to be.

The bondholders become equity holders.

They now own the banks which they once lent to.

The banks are recapitalised using bondholders’ funds and the banks’ balance sheets are rebuilt via debt dilution, not via raising new capital to pay old debt.

The taxpayers have paid enough.

The world has changed and the strategy of hoping for something to turn up is not working and will not work.

We have no money and the world isn’t prepared to lend to us in order that we bail out reckless lenders.

Let’s move on. Let’s hope that the FT’s editorial and the downgrade will nudge us a bit closer to sanity.


  1. adamabyss

    David, you forgot to mention that Marlo has the security guard bumped off later in the show…

    • foi foi moi moi

      we need an Omar to throw a spanner into the works, why not run for office in the next election David you have my vote, you seem to forcast blunders 12 months in advance, surely foresight like this can be of more benefit to Ireland as a nation as an elected representative. Or maybe you dont have the qualifying criteria, ie. your father, uncle, grandfather was a party stallworth or member, they were elected representatives in their local town councill or district, you have attended 1500 funerals and shook 10,000 hands and would bleed dry for the party leader not the party idea. These seem to be the only qualifying criteria i can see that can mean you run for a seat in the Dail. I now look a politics in this way…i dont think their is one TD in the dail that cares about anything except keeping his local votes happy. The idea of elected representatives with the good of the country in mind im afraid died in Beal na Blath and all we have endured since is corrupt mafia style politics and a showboat that resembles an angry dispute at the Mart over money instead of a constructed civilised parliment.
      If Anglo does go under it will be intetresting to see the tribrunals that will come out of it..possibly this is why our elected team of Goons are trying everything in their power to keep this morbidly obease, chain smoking, sucidial, cancer ridden brain dead patient on life support.

  2. kevinc

    The question I have is, what about all the tax payers who invested in these banks. Pensions, savings, funds have all been put in there by hard working tax payers too. Defaulting isn’t free, we’ll still pay for that too. You give the impression that it’s a victimless action.

    I’d like to know who it will impact, and how it will impact them.

    • tony_murphy

      kevinc, Read Flash13 comments on the last article. It explains what “savings” in a bank really are. It’s a harsh lesson for all of us.

      • Invalid username

        No, don’t read that mistaken thinking! Flash believes that savings are backed by loans.

        The complete opposite is the truth. A bank must have your savings before it can lend money.

        Savings are the surplus of your labour after all your expenses. Before credit was a commonplace, savings were relied upon to fund large purchases like land, houses, horses, etc. And funded retirement before the pension existed.

    • liam

      Retail depositors are creditors in trust, they have to be covered by a guarantee (morally if not also legally, though I have no idea if this generally held concept has any credibility in this Kafkaesque country). Maybe the only functioning part of some of Ireland’s banks are their retail businesses. The bad news wrt your question is that everybody else is in the risk-taking business, just as any investor in any business is.

      Any investor, whether its a pension fund, a hedge fund or a shareholder is in the business of gambling. “The value of your investment may rise as well as fall” etc. These are the people who will have to come to the negotiating table, as per the normal rules of capitalism. In a real country, with proper corporate governance, the shareholders at the very least have some rights, and it is staggering that there appears to be no mechanism whereby shareholders have recourse to any law that requires public businesses to act in the best interest of their shareholders (eg Sarbanes-Oxley, which many here are cynical about but its better than nothing). A few private lawsuits against the senior officers of the banks by a shareholder conglomerate would have put paid to this nonsense a long time ago, but thats academic at this point I suppose. What we got was pensioners throwing things at AGM’s. Understandable, but hardly legally binding.

    • uchrisn

      Kevin,
      Pension Funds should be risk adjusted, in other words a certain amount of the fund should be in low risk stuff, e.g gold. If its not bad pension management. Savers will be refunded money up to a certain limit which would cover most taxpayers. Hundreds of banks have collapsed in the States and savers have been compensated.

    • idij

      Past performance is no guarantee of future returns. Sorry, but that’s all that needs to be said about people’s investments. People make risky investments in the belief that they will get a higher return. It’s not the state’s business to bail them out when it goes wrong.

      If they wanted their money to be risk free they should have put it in the bank rather than in the banks.

  3. Great article again, few points here as well

    General Humbert and the Irish E(e)conomy!

    http://bit.ly/boVfT9

    The Wire..great series:)

  4. Deco

    David – excellent article.

    Let’s face it, the establishment is concerned with keeping up the veneer. There is something seriously imbalanced with the Irish economy, and seriously unsustainable about our consumption patterns in this country. And this has been the case over the past forty years, bar an odd period of deflation, followed by currenncy devaluation and a resulting inward investment. And all along we were fooling ourselves. But nobody is allowed say anything about it. (‘cribbin an moanin’ an sittin’ on de fence is a loast opportunitty’). We even have clowns like Dermot Ahern telling us that the consumption is inadequate. The point of the broadcast media is to encourage consumption and to pocket a profit in the process.

    I remember in secondary school, hearing a line by Brendan Behan – “the type of well to do people, who have lace curtains on the windows, and nothing on the table”.

    Behan was pointing out the ridiculous nature of some people’s preoccupations with looking good, to the detriment of their own good health. Well, this pre-occupation with venner, is the dominant social more of contemporary Ireland. Contempt is to be heaped on anybody from the wrong background who gets money (like Roy Keane), or who gets money and who doesn’t socially deserve it (usually this sort of person left the country). In Ireland, officially a republic, the aristocratic mores are strong enough to ensure that people who get money by hard work, never feel as if they deserve it, unless they have the social status to prove that they deserve to be wealthy. In many ways it is a bit like the old Puritan ethic of the elect, except here it is based on pretence and social impact. Is it any wonder that a small amount of prosperity resulted in more than one decade of crass stupidity, misallocation of resources, and a debt mountain.

    Being humble is the ultimate no-no in a society that is bankrupt in it’s sense of practicality and it’s finances. Better to get out and be sweeping a floor the other side of the world than be seen doing it locally. (what would the neighbours think – sure everyone in Australia goes there on their holidays).

    Let’s just get beyond this stupid ‘pride’ construct which is destroyed everything and throw out all the nonsense that has been built up around it. The pride problem not only makes us us bad problem solvers, it means that when the solution is completely obvious, we still go on a trajectory to arrogance that results in disaster.

    Apart from anything else it would result in better decision making, and a less cruel world on those who do not have money or who are going through a hard time at the moment.

    • michaelcoughlan

      Hi deco,

      I completely agree with you BUT…………….

      ‘You want it to be one way.”

      ‘Man, stop.”

      “[But] it’s the other way.”

  5. biskalero78

    Wealth can neither be destroyed or created, it is only transferred through deception and false crisis. This fact is enough to take back our country. The people of Ireland are being robbed through deception and lies.

    • michaelcoughlan

      Hi,
      Wealth most certainly can be created. I don’t know where you got that idea from.

      • biskalero78

        Sorry i did not put it right, yes wealth can be created but it all comes from the same pool of dosh. Let say i buy shares for 200,000 pounds, i give that money to a company, the next day shares drop 50% and now i have only 100,000 pounds in shares , where does the other 100,000 pounds go, the cash has not disappeared in to thin air.

        • biskalero78

          what i am saying is that money has been moved or transferred. Now if you have someone in the market that is in the know then the sky’s the limit. MARKET MANIPULATION.

          • michaelcoughlan

            Hi,

            You are correct the money will not have vanished into thin air. You are mistaking wealth creation from entrepunearial activity to wealth accumulation from dealing or investing in company shares. You only make a gain or incur a loss at the point when you subsequently sell the shares. If the underlying company is sound then the probabilities are that the share value will rise so long as you haven’t paid too much for them in the first place. Warren Buffet makes a killing by waiting until the market prices for shares collapses and then he hovers up quality shares at bargain basement prices and holds them for the long term. He is an investor. Soros on the other hand is a trader and is in for the quick buck. If you are a block layer and you take blocks and cement and make a wall the value of the wall will be more than the value of the blocks and cement hence wealth has been created unlike the first two examples. People in my opinion get too hung up on price and should instead focus on value. The market is probably being manuipleted in some form but you always have the option of not investing in shares.

  6. biskalero78

    Like the rest of the world, Iceland was robbed , Greece was robbed , america has been robbed, Spain,Portugal… the list goes on and on. When are the masses going to realise that this is one big scam to destrou culture, sovereignty and ultimately lead to a on world central bank controlled by very few people. The evidence for this is overwhelming and should be given to every Man , Woman and child in this country. No Bullets anymore , just financial ones.

    • BrianC

      Hi

      Yes I see what you are getting at in a certain light.

      I am not too sure about creating from the same pool of resources already there. Is fractional reserve banking not really the creation of something from nothing.

      Meyer Amchel Rothschild said:
      “Let me issue and control a nation’s money, and I care not who writes its laws”

      Thomas Jefferson said: “I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies” “the principle of spending money to be paid by prosperity under the name of funding is but swindling futurity on a large scale
      “If the American people ever allow the banks to control the issuance of their currency.. the banks and corporations that will grow up around them will deprive the people of all property, until their children wake up homeless on the continent their fathers conquered.”

      The real issue is the right to print money and use it to inflate generate wealth then deflate orchestrating the transfer of the generated wealth to those who issue the money. In order to do this they need not alone complicit Apes but also stupid ones who think they know what they are doing and mistakenly believe they can influence matters. Ireland is less than 1% of EU population and of no consequence in anything despite our arrogance in believing we are of some substance. We are welded to a hard currency over which we have absolutely no control. But the Apes can control certain elements namely public sector pay internal taxation and internal regulation of the financial community and issuing equity for debt. So how do we get our Apes to use that within their means to make the pertinent necessary changes. It may be the case they are not as free to do as they would like so in meek defense of our Apes maybe they are not as stupid as we think. But truthfully I think they are just stupid and David is right now the debt to equity message is coming from the old colonial power they might venture to steer a new course of action. And there is one sure thing we are still on the road of robbery where that which we created is being transferred to the few and many more will be homeless. Aplogies for any spelling mistakes.

  7. michaelcoughlan

    Hi,

    What no one has explained is why so many apes are “promoted” in the banks and the civil service and so much talent is in exile. My two cents worth it’s a result of the promotion of loyal incompetence ahead of diligent professionalism. In other words you are promoted to protect the incompetence which destroys everything rather than for you skill or ability which would be a threat to the status quo. I am 38 years of age and have witnessed this in the construction industry, banks, sport etc and can understand why talent is viewed so contemptuously when all the apes are doing is chasing titles. The sad part of this observation is that if enough people believe a title is something worth chasing then that majority view will predominate and if you are not the kind to sell your soul and protect the establishment then you are going to find yourself on one lonely road. Sad reflection on the nature of the culture of our Republic.

    • biskalero78

      It is the Elephant in the room. Apes = toe the line, no questions asked.

    • liam

      Its really quite simple. If you are in the civil service, the banks, the legal profession or any other of the protected species in Ireland, when faced with a problem/situation/challenge/whatever, the resolution follows this line of reasoning:

      1. How can I benefit personally from this situation?
      2. If I cannot benefit, is this a threat to my empire?
      3. If ‘no’ to 1 and/or 2, how do I make this problem go away with the minimum amount of effort?

      That is the Irish concept of management and decision making as I see it (and how I come to regard myself effectively as a foreigner in this country).

  8. Original-Ed

    At least the delusion is now coming to an end – the imf/ecb will more than likely come to our rescue in in the first quarter of 2011 and that we’ll give us real clarity about our situation for the first time since the bubble burst. The present uncertainty can’t go on and it looks like our politicians are now reconciled to the inevitable – they look more relaxed day by day as they accept that the problem is way too big for any internal solution.

    • michaelcoughlan

      subscribe

    • There’s wider acceptance among FF and GP they’ve made a cockup. They’ve made the mess worse. Now they look to Europe to bail them out:) If Europe bails them out, they’ll claim its their doing. This is a problem. Solution is simple, get rid of present incumbents as part of a full cleanup. Anglo, going…going…

      • Deco

        No, I don’t think there is an acceptance. Rather an acceptance that the people will not agree with government policy.

        These are politicians, not problem solvers that we are talking about.

        The whole thing is an exercise in optics.

  9. Lius

    David, you are always way ahead of these idiots.

    And now Dan Boyle’s GREENIES are jumping on your bandwagon.

    • yep, looks like the greens have realised this whole thing is ending up in a cul-de-sac. With nowhere to go they’re suddenly trying to distance themselves. Eamon R must feel a bit peevish – having been rolled out so often as the strategy spokesperson.

    • Deco

      The GP are only against it because there are backbenchers in FF who are aainst it, and when this happens it leaves the GP exposed as being the real driving force behind government policy.

      ‘The tails that wags the dog’ etc….

      It will be interesting listening to why Boil was in favour of bailing out Anglo until now…..

  10. paulmcs

    We just can’t afford this any more. An orderly default is inevitable. They’re probably just waiting for the banks to roll over the €30 billion this September to begin discussing this with the ECB and EC. I read this weekend that we are staring down the barrel of a €200 billion deficit that will consume one-third of all taxes, duties and excise collected in a year just to service. We aren’t going to make enough by deflating the economy further through yet more harsh budgets. Debt-for-equity needed for Anglo at the very least if we are to keep our head above water.

    I should have left this country when I had the chance…we get the politicians we deserve…

  11. If the Irish voting public had any sense, they’d be asking where all these tens of billions are coming for to prop up zombie banks, which weren’t there for say health care? Calling a halt to throwing money at the banks surely cannot be worse than continuing as is.

  12. Philip

    It seems to me that we need to start to try and build a plan for “afterwards”. The inevitable has come about because it had to. The pretence that hoped we’d recover in time to maintain the current status quo is at an end.

    Now what? SO we may have an election, we may start to see property fire sales and proper mark to market valuations. And we may see people for the first time being able to afford a house (let’s stop calling it a home!) without it compromising other choices needed to make a home in a community. But before we get to this point, we need to see what’ll happen next in terms of jobs, small business growth (currently decimated) and how we finance a public purse of a right-sized public service.

    The next crisis I see is a public service lockdown (that means bye bye Health and Education and Water and Transport) as people have to take the brunt of cuts in salaries and head count. There is no where else to pull the revenue needed. The bonds will be dried up for a year or two until we can start building credibility again. Once the Anglo/ Bank crisis becomes history, Public Finances will be the new crisis. This may spark off a Euro exit crisis because I cannot see the ECB paying any more.

    It seems to me that Ireland (if it manages to remain stable socially – and I think it might), will become the next low cost country in Europe. Great roads, reasonable telecoms and an emerging Mediterranean climate (let’s dream a bit!). Give it 3 years. The best is coming. Lets start preparing.

  13. Deco

    There was an article in yesterdays Business Post – and when I seen I thought about the implications of the article. Basically, Dan Boil exists as the man to ensure that there is a perception than the GP have a superior conscience to FF. So when a bunch of FF backbenchers start to get concerned about something this is a danger to the public perception of the GP.

    http://www.sbpost.ie/newsfeatures/banking-on-trouble-51324.html

    That was yesterdays news. And now the question arises ‘How is Dan Boil to respond so as to ensure that this does not damage the perception of the GP as being adrift of public opinion ?”.

    And now, guess what, Dan Boil has decided to steal the clothes from the FF backbenchers in a move that reminds me of Bertie Ahern declaring that he was the only socialist around and Joe Higgins then taking a swipe at Ahern.

    Dan Boil – the game is up. We know Dan Boil is a two faced prat and a complete hypocrite.

    No point in wanting to get out of bailing out Anglo now, considering that Boil and the GP were the clowns who wanted to bail out the banks. “We must save the banks before we think about saving the factories” he utterred after Dell hit the wall and thousands got laid off. Boil has already suceeded in having his way. The banks got bailed out. And he then managed some window dressing so as to make it look like the GP were pushed into the farce. Now Boil wants to get credit for changing his mind. After agreeing to stick 22 Billion in Anglo !!! this is farcical. I mean now that the horse has gone and galloped for two years, Boil wants to fix the stable door. What a idiot !!

    Closing down Anglo now will be more inefficient than refusing to nationalize it in the first place.

    Incidentally because the article about the FF backbenchers did not mention INBS, Boil did not see the need to close down INBS.

    On matters of conscience like the continued severe under-representation of two constituencies (and possibly three) in an unconstitutional manner, due to delays in pendging by-elections, Boil has nothing to say. Clearly the prospect of having GP candidates eliminated on the first count is nothing the pretenscious hypocrite is too eager to get rushed forward.

    • liam

      On the SBP post article, surely this is just a bunch of back-benchers securing their own future, in the knowledge that the Cowan regime is getting seriously wobbly? It wouldn’t be the first time an FF/FG loyalist has caused a stink or even resigned in anticipation of an early election, in order to cleanse their image of the tainted and soon-to-be-departed leadership.

      I personally don’t believe for one second that these guys would put their cocks on the chopping block for any other reason and certainly not on behalf of the country.

      • Deco

        you are probably correct. It is hilarious. Watching these clowns running around to see who can be the most committed to binning Anglo banglo. I mean none of them said anything for years. Maybe the are reading these articles or listening to Constantin Gurdgiev on the radio taking the p155 out of the clowns in the DoF….

  14. What is The Reality ?

    We all agree what should be done .If it is done, what is the reality? And how does it ‘Hit’ you? Can you do something ‘Now’ to reduce the impact on yourself and your family?
    Do we really know ‘what is the reality’ ?
    Our Grannies sitting rooms were great places and held traditions from another time of old .Yes there was a veneer .Our Grannies were not malicious .They saw a purpose in what they did and it was productive .We never questioned their motive and certainly Grandpa would not even dare to think about it .The sitting room was a connection between an older time of memories and photos and the rest of the house was ‘reality living’.

    When the shit hits the fan where does it go?Where will you be?

    • michaelcoughlan

      Hi John,
      As usual very insightful questioning to get people thinking. To answer your questions in the first instance I will vote with my feet and leave Ireland with my wife and toddler. Do I feel guilty? No. It’s unstated government policy. I have just opened a bank account in Northern Ireland for the purposes of paying bills and having a nest egg in case the authorities here put a restriction on the withdrawal of cash from savings in the banks in Eire. I also have some money already invested and am about to invest more in allocated gold in three different vaults which are in the UK, Switzerland and Hong Cong. I hope everyone else is prepared. I can’t say for certain if there will be a total collapse like Argentina in 2002 but I am preparing for it just in case. I am not a conspiracy theorist but I will prepare for this reality, my reality.

      • And if anyone reading this with any concerns about the future of Ireland needs a little guidance on survival and filling the fridge, the preceding comment can’t spell it out much clearer.

        The fundamental rule of survival is to put on your own seatbelt first.

        If it all works out well and all the contributors here are mad, David McWilliams is delusional and Professor Gurdgiev is a complete Russian LaLa, then you simply undo the belt and drive on.

        If, on the other hand,all the contributors here are correct, David McWilliams is the Messiah and Professor Gurdgiev is a Russian version of the Delphic Oracle, only one thing remains constant.

        Dun Aengus is a spaceship and we’re all happy.

        Innit, John?

        • Dun Aengus was once a complete circle and it was a man made print on the earth to salvage the earths energy flow to better mankind.It was a spaceship, insofar ,as it read the heavens and linked with the pastoral energies of the people then.
          It must have been some ‘fat twit’ back then, who spent too much time on the rocks drinking mead and forgot what he was doing and babbling his conversation with lipsuction to the tall pampass grass growing and over looked the reality around him, that caused the great tetronic plates to move mountains into the ocean. He played Humpty Dumpty with Ali Baba and the forty thieves and fell off his rocks and the rest is history.
          Oh those glories are long buried and with their secrets .

  15. Deco

    Let’s face the establishment in Ireland is a bunch of clueless spoofers.

    http://www.independent.ie/business/irish/honohans-wife-takes-euro400k-hit-as-crh-slides-2316032.html

    If these people read Phoenix Magazine they would know better. This is what happens when we take seriously pronouncements from the IT, RTE, and FIRE economy insiders in Ireland. The list of people who are your betters here is fairly long actually.

    http://www.independent.ie/business/irish/honohans-wife-takes-euro400k-hit-as-crh-slides-2316032.html

    Phoenix Magazine also warned about Anglo being a disaster.

    The whole incident of the GP playing optics over the Anglo saga is hilarious.

    David McW, Brian Lucey, Morgan Kelly, Contantin Gurdgiev etc… have been proven correct less than one month after the nonsense of the McGill Summer School. This I find insightful. As far as I know none of the four economists were asked to participate in the annual shindig and booze up in Glenties. After all, they would spoil the party.

    Amazing really, Sean Fleming changed his mind on Anglo and suddenly the GP have discovered that they are suddenly against the policy framework that they engineered in the first place.

    This is what I have been saying all along. Basically, lobby FF backbenchers, then there will be murmerings of discontent. Then the GP will be upstaged in their act of pretence, and you get a policy change.

    This is not coming about as a result of any sudden burst of intelligence or brain activity. This is purely as a result of politics and the need to control your party’s public perception.

    • Just an indication of the intellectual deficit amongst our elected representatives, by inference an indication of the intellectual deficit imbued by our “Universities” which conferred degrees on these people, these “Captains” and by default, unfortunately, a savage indictment of the voting populace of this Island who voted for this Animal Farm.

      Plus ça change, plus c’est la même chose.
      N’est pas, M Allen?

  16. liam

    David,

    Glad your a fan of The Wire. I repeat a comment I have made many many times before: Ireland suffers from a National Inferiority Complex that infects all aspects of society, not just Government. Glad you also explicitly referred to that here.

    At the risk of repeating myself ad-nauseum, John Adams put it best 240 years ago, when his advice was sought on the creation of a constitution for Massachusetts. What was required in his view was “..a government of laws not of men”, referring to the need to move beyond systems based on the divine privilege of a monarch to one based on more universal legal concepts of rights and responsibilities.

    Ireland has never had that kind of thinking, never a visionary moment about the type of country the Irish want to have, merely an exchange of one tyranny for another, a repainting of the post-boxes from red to green and resumption of business as usual. Maybe the EU will save the rest of Europe from the Irish, it seems apparent that the Irish are incapable of saving themselves.

  17. BrianMc

    All,

    Constantin Gurgdiev has drafted a manifesto which is open for comment here:

    http://trueeconomics.blogspot.com/2010/08/economics-27810-manifesto-i.html

    Add your thoughts.
    Something is up & running.
    Give it momentum.

    @BriMcS
    https://twitter.com/BriMcS

  18. NO HOPE

    Why it has taken the rest of the world so long to realise that a bunch of morons run the place, is amazing in itself. You would think serious economists would have seen through the charade 2 yrs ago when the country was collapsing and the government went on summer holidays for months. People without an economic degree between them were talking about increased rates, downgrading and possible default. It doesn’t take a genius to see that there is no leadership and we are basically screwed. When they came back from holidays they sat around scratching their heads with no plan whatsoever except to reduce dole payments and a few other simplistic cuts. Then they took those cuts and a few extra billion to sink into Anglo with no hope of return. Astounding to think that even now while we sink further into the abyss that the leadership is off playing golf and camping and actually INCREASED their holiday time. What is it going to take for the next downgrade in credit ratings? For them all to go on a world cruise for a year, curtsey of the taxpayer? We would be better off actually if they did disappear. Now the master plan is to put people back to work fiddling around in tourist centres, old age homes and other “community” services in exchange for their dole payment. Basically a load of bullshit to make the live register reflect a reduction in unemployment. Do they honestly think this is job creation? The whole situation is just bizarre. The problem is, the place is run by teachers, social workers and people with arts degrees. Not an economic plan in sight, no job creation plans, no economic stimulus, or a workable solution that has the remotest possibility of a successful outcome. All they can come up with is cuts, ridiculous time wasting exercises and more stupidity. The only thing that can help us now is if the IMF come in here and run Ireland with serious economists, who have actually done something related to economics, and have a track record of success. The alternative is to leave, as this will take another 10 -15yrs to sort out even with competent economists making the right decisions.

  19. huffnpuffpolly

    It is my considered opinion that we can make our own reality, but because we are all such individuals, governments and elites don’t need to worry because they know we will never agree on a strategy to oppose them. I do not agree that it is ‘the way it is’ and there’s nothing we can do.
    WE need to oppose family dynasties in politics. I’m glad to see Olwyn Enright is not running in the next general election. There’s also two other family dynasties, Flanigan and Cowan in Laois Offaly. Just look at the 3 senior members of FF: Cowan, Coughlan and Lenihan, all inherited seats. And don’t give me that rubbish about doctors’ sons being doctors and solicitors’ sons being solicitors. Political representation is a different category and democracy is at risk when it is taken over by families. We might as well have a monarchy and its aristocracy.

    SAturday, August 21, 2010 Newstalk Down to Business had President of ACCA on, and he is still talking about too much regulation and we should teach ethics. This is simply ridicilous when you hear the excuses our current elites use: listen to Sean Quinn,Sean Fitzpatrick, Michael Fingleton, Eugene Sheehy, Ivor Callely etc, ‘I did nothing wrong, I broke no law’. We have to create LAW that is specific and somehow enshrines the morality of fairness, and is applicable to everyone. The accountancy profession hardly comes out of the crisis looking good.

    Has anyone yet heard a politician explain why they get a payment just for turning up at the Dail, as well as their expenses. Then you have the usual excuse from those POLs. who think they are the good guys saying ‘Politicians are not all the same’. And no, they are not all the same: most of them know what you can get away with, without creating outrage. The likes of Callely ruins it for everybody because he goes that bit too far. But there seems to me to be a general sense of entitlement.

    Our legal system needs a complete overhaul. it is simply not fit for purpose and even Ruari Quinn seems to think that ‘elites’ are treated gently by our judges. There is much comment that the people want ‘retribution’, but is it not truer to say we want the LAW to work in such a way that prevents people from acting recklessly and endangering other people. If there is no punishment enforced, why would people think twice about doing the same in the future?

    • Thermus B. Airgetinin

      I’ve been a reader of this blog for some time. Some of the responses from others such as Deco, John Allen, cbweb etc have been most informative and I must admit, I am hugely impressed by their knowledge and grasp of the subject(s) they comment on. However Huffnpuffpolly, You’re comment today has completely “nailed” what I have been trying to say (but wasn’t smart enough to put into words) from the beginning. The “I’ve done nothing wrong” line has been used to such an extent of late, that as soon as you hear someone use it you know instinctively that you are listening to a crook who has, in fact, done nothing right. The political system allows that “Shysters” can enrich themselves, bowing and scraping to their filthy rich establishment paymasters (They say that ALL the toilets servicing ALL the boardrooms in ALL the Banks in ALL the world don’t need to have any toilet paper because of the politicians constantly licking the bankster’s arses) while destroying any chance we had of making a better future for ourselves and our children. They can make life shattering decisions then calmly step aside for the next “Goon” to take over(see Bush, Blair, Ahern etc)without any fear of being brought to task or bearing any responsibility for their criminal actions. It’s happening in every “Capitalist” country in the world and is equal in nature to the fall of the Communist system in Russia, another great”wheeze” which introduced us to “previously unknown” individuals who took control of the gas and petroleum markets and, with their plunderred billions, could buy football teams and the worlds biggest yaghts while their fellow countrymen couldn’t buy a loaf of bread. It is simply robbery, no more, no less. The moral of the story for the rest of us is; Life’s a shit sandwich, the more bread you have the less shit you have to eat! When we can tackle and rout the elites, thats when we won,t have to eat their shit anymore>

      • michaelcoughlan

        Hi,
        When Eircom here went Private O’Reilly lead the consortium which bought it, asset stripped and sold it within four years as far as I know. He blathered on about all the “profit” the share holders got with him being the largest one and where did he get the moola? Soros as far as I know. And these guys are held up as pillars of the establishment? My arse. Return on capital and fuck everyone else seems to be the order of the day. As for Eircom all the revolving ownership since and even more asset stripping my guess it won’t last two more years with the amount of debt it’s been landed with. As for O’Reilly? Poor old sod is so confused he couldn’t even answer a simple question “what is you nationality” preferring to reply “it’s a private matter”. I presume he is Irish in the boardrooms in the US and a loyal Brit in the UK.

        • michaelcoughlan

          . Hi,

          I forgot to ask could anyone shed any light as to how the board in INM could justify a €300k PA payment to O’Reilly after O’Brien gave him the welllie saying he deserved it as “President Emeritus”.

    • liam

      Actually, I have to say I have huge sympathy for auld Ivor. He knows damn well that, as you say, every other TD and Senator is at the same racket, so why should he fall on his sword? Changing the names on the chairs won’t change much either.

      On Callely though this brings up another rant topic of mine, which is the lack of transparency. The default position is for the precises disbursement of public money to be hidden. This is absurd in a democracy. (The FOI act is in fact a piece of legislation that formalises the process whereby a public body can tell you to feck off in response to a request for information and not have to provide any good reason).

      Sorry if you are reading me say this for the millionth time but: Require all elected officials to publish online and in an extensible format all of their financial interests, and their professional accounts, every lunch, plane/train ticket, mileage claim, expense of any kind, and we will have no more Callelys. This is so obvious and should be the default position not just for elected representatives, but for all publicly funded bodies, incl Govt. Depts., local Councils etc etc Its your bloody money they are spending after all!

  20. huffnpuffpolly : I agree and your prose says it better than others.Maybe we should call on all the Grannies in the country to go into the sitting room and talk this matter through and deliver a proclamation.

  21. Gege Le Beau

    Life has improved enormously since I stopped listening to RTE/PRAVDA and Irish politicians.

    I use a variety of info. sources and I have a feeling for what is coming down the line, touched on in David’s article.

    We ain’t seen nothing yet. Those who are overextended/financially exposed do not normally factor in the ‘unknown element’, the issue that comes out of the dark like a 9-11.

    Best to keep life as honest and simple as you can.

    The bailout and government cheque writing postponed the inevitable, a lot will depend on Lenihan, if he goes then I expect the flood gates to open faster…

    • michaelcoughlan

      Hi,

      I have come to that conclusion some time ago also. I stopped wearing a watch and I even wanted to get rid of the TV but a family member (not my wife) talked me out of it because in his eyes “what would the neighbours think?” Really sad.

      • BrianC

        Hi

        Yes the majority of the media in Ireland is lacking in ability to ask the real critical penetrating questions. Why? Are they stupid? I don’t think so. It is probably more to do with maintaining the status quo. Don’t worry what the neighbours think (not that you are the sort that would) keep the TV even if only for the entertainment and please don’t leave. We get more insight on these blogs

        I liked your thoughts regards the entrepeneur wealth generation pricing and lack of focus on value. Gold has a price but the reality of its value well that is another thing and make sure you get coins and not paper and always remember you can eat neither.

        • michaelcoughlan

          Hi,

          Just a little insight on the value of gold. During the time of Jesus an ounce of gold would buy you a very expensive fully kitted out suit of clothes and under garments. Today an ounce of gold will buy you a very expensive fully kitted out suit of clothes and under garments. Gold’s value has remained constant. As for Fiat money well……………….

          • BrianC

            Oh yes I would not dispute that, very true, most correct. But the train a comin down the road may be of greater conflict and precious metals may retain their value if you can survive the upheaval. In times of real conflict you can survive three days without food and water after three days the robbing and stealing starts after nine they start killing. Now it will probably never come to that but I had the great pleasure on discussing things with a German Chap who survived Stalingrad and he changed the way I looked at price and value and gold just weighs you down. He told me he saw people give everything they had just to survive the next day.

            Enslaving a currency to a precios metal may not be the wisest thing. But it is a commodity and as long as someone is prepared to pay for it then it will have value and you are right it seems to have a constant and I hope that remains so.

          • michaelcoughlan

            Hi Brian,

            Your make very valid points and observations. In Leningrad during the siege the Russian population resorted to digging up corpses in graveyards up to a year old to survive. A currency was only ever invented to facilitate the means of exchanging value and considering all the fucking around with Fiat money gold would be better employed in this endeavour. To take up the point about the German soldier I bet you if one person had an unlimited supply of chickens to supply he could have acquired the whole of Stalingrad the new currency being chickens. However I bet you he would have not been able to acquire a pig for a chicken the pig having more currency in such a closed market prevailing in the Cauldron. Although Ireland is in dire straits Gold will still be readily accepted in other countries even outside the Euro zone.

  22. Gege Le Beau

    Calling it as it is………method behind the ‘madness’. Elites will emerge stronger and richer from this so called ‘recesssion’, in fact it is a giant economic readjustment, which seeds more power back to those who control the world economy. Keeping people on the edge of survival, it is not about people in the Central Bank, or Dept. of Finance being stupid, it is about implementing policy, the instructions come from elsewhere and we follow through like the compliant, dependent State we are.

    “The fact remains, however, that the kleptocratic rulers in the US, EU, and other debt-burdened countries know exactly what they are doing: to let the recession drag on, to take advantage of the crushing recession in order to extract “enough” concessions from the working people until welfare states are dismantled and labor costs in the more developed capitalist countries are made competitive with those of the less-developed countries. This explains why despite new signs of further global economic contraction, the reigning governments in these countries (whether they are nominally headed by Socialist, Social-Democratic, Labor, Democratic, Conservative or other parties) are maintaining their coordinated abstention from expansive or stimulating fiscal policies while continuing their brutal spending cuts on health, education, wages, pensions, and the like.

    This is not to say that these governments do not want to have economic growth or job-creation–they do–but that they want them on their own (Neoliberal) terms, that is, through Neoliberal policies that would create jobs that would pay wages on a par with those of workers in less-developed countries. In other words, they prefer the kind of lopsided economic growth whose fruits would be reaped mostly by the wealthy–the so-called trickle-down or supply-side economic growth. As writer/reporter Patrick O’Connor points out, “In the US, Europe and other advanced capitalist economies, the aim is permanently reducing the living standards of working people.”

    Full Article
    http://www.counterpunch.org/zadeh08302010.html

    • michaelcoughlan

      Hi Gege,
      Whilst I agree that the result you have postulated will in fact occur I don’t think it’s as conspiratorial as you suggest. One of the events which happened just prior to the vicious de-leveraging which has taken hold in the world was the removal of the uptick rule in financial regulation in the US. The following link describes what it is, when it was introduced and what it was designed to do. http://en.wikipedia.org/wiki/Uptick_rule . I haven’t heard one commentator not even David describe or talk about this seemingly innocuous administrative change but it has had an enormous effect on the whole world. Although I am not an equities trader I do know what short selling shares is. A person basically borrows shares from a broker sells them even though he doesn’t own them and buys them back a short time later lower than the price he sells them for. The difference is the “profit” he makes. In this simple instance the return on capital is infinity because the person in question never owned the shares in the first place. The most important point that needs to be made here is that if you have access to sheer weight of capital and can sustain an attack on even a health country or company you can kill it and make a massive profit from your total obliteration of your chosen prey. I really hope that David or someone of his calibre takes up this point and gives us an analysis as to how it’s continue absence affect all of us in the current climate.

    • StephenKenny

      The problem with being anti-globalisation is that it makes you, very quickly, into a racist, or worse, a nationalist, with all that that implies.
      I’ve been reading these sorts of articles all of my life, and other than the standard anti-western rhetoric, they generally have little or no viable suggestions. This person has one: To, effectively, either start a trade war, or destroy western businesses, in favour of similar businesses native to 3rd world countries.

      This was inevitable from the moment that the left, and the right, started down this road. There is another piece of reality that has come along over the same time period, taken from the Elizabeth Warren lecture on the collapse of the US middle class: The average US family now has two people in full time work, rather than one in the 1970s, yet is only very slightly better off (ignoring all the accompanying economic risks that she lists, that make their position far worse). Double the hours worked, per family, and less than 10% increase in income (with the fall in men’s incomes, the net result is obviously less).

      We can’t mention the globalisation issue because it’s linked with race, and we can’t mention the second because it’s linked with gender.

      There can be no discussion on this issue, and Ismael Hoosein-Zadeh’s ‘first step’ would lead to disaster however it’s implemented. That is to say, disaster for most of us, but given my recollections of 1970s Marxist dialectic, it’s us who’re the problem, so perhaps he’s hoping we’ll act like a bunch of turkeys voting for Christmas.

      We’ve let the political activists and the multinationals drive policy, and found ourselves cornered by the political dogma that we’ve blindly chosen to embrace, and embed within our legal systems.

      Surely you can see it: There is no ‘someone else fixing it’ solution that will do anything but make us poorer, significantly poorer. The only possible solution that I can see is to go the Eisenhower ‘Sputnik Wake-Up Call” route, which I’ve talked about so often over the last 10 years (4? here) that I’m not sure I have the puff to do it again.

      • adamabyss

        Stephen, what is the Eisenhower ‘Sputnik Wake-Up Call” route, at the risk of tiring you?

        • StephenKenny

          The fist man made satellite, Sputnik, was launched by the Soviet Union in October 1957, and it scared the bejesus out of the US public. The president at the time was Dwight Eisenhower (who’s 1960 speech warned of the threat of the US military (congressional) industrial complex).
          For most US people the main result of this was a very popular, government led, rush to get people trained up in sciences and engineering. Anyone unemployed, or thinking about further education, or in some way available for further education, was offered significant state funding if they chose to do one of the approved subjects – basically, anything in the science and engineering field. So a whole wave of young people went through science and engineering degrees, and, as a byproduct, those who chose the liberal arts, were people who had real drive to do so.

          One result was the explosion of US technology r&d, private and state, in the 1960s, and the spectacular technology-led decades since.

      • tony_murphy

        I’ll mention this book again, Peter Hitchens – Abolition of Britain.. Well worth reading.

        Anyway, I can’t do his work justice..

        My own poorly constructed thoughts on it.. I’m no intellectual

        Strong trade unions and strikes in Britain in the 70s/80s led to manufacturing being moved overseas.

        Women were encouraged into the work force, because they didn’t form strong unions like men. They cost less etc

        The Family unit is broken. Kids are reared / conditioned / educated by the (evil) TV in the absence of either of their working parents. Kids are treated to programs like the Bratz, which serves the consumerist society etc..

      • michaelcoughlan

        Hi Stephen,

        We live in a free country and I respectfully disagree with you that we can mention anything we so choose so long as we have the courage to do so. Globalisation and its effects transcend race. A starving white person will succumb to malnutrition in much the same manner as a starving black person. The same goes for women and irrespective of religious belief or political outlook. As for the destruction of western businesses you will never be allowed to do that. Your idea about a trade war. Who will we engage in such conflict and to what ends? We tried that in the 30′s and 40,s and it got us no where.

        • StephenKenny

          Michael
          Of course you are right in what you say. I was not commenting on the reality, or the truth, of any of these areas, but I was commenting on the general political and social impossibility of such discussions. Any such attempts merely result in the perpetrator being branded some sort of extremist, and any subsequent comments ignored. There is no discussion because, politically and socially, there can be no discussion.

          Trade wars and commercial demise: I was merely describing, as I see it, the only two outcomes of efforts to execute the ‘first step’ as described in the referenced article in Counterpunch.

          No one ever wants a trade war, but people often want trade barriers – quoting unfair competition – that benefit themselves. Similarly, any effort to force corporations to offer pay and benefits equally, wherever in the world they were employing people, would merely result in the corporations leaving the jurisdiction of any high cost countries (going broke, as far as that country was concerned), and relocating, legally, in low cost countries.

    • Deco

      What bothers me the most is the ‘socialism for the rich/well connected and capitalist competition for the poor’.

      We have bailouts for the failed financial markets. And we have insults and more stupid promises for the labour market. And to make it even more absurd the labour market is taxed to the hilt in order to subsidize the casino sector business. (as Eric Jantzen calls it the FIRE economy Finance, Insurance (including pensions, healthcare, derivatives) and Real Estate).

  23. Gege Le Beau

    A very interesting presentation from Professor David Harvey, thought provoking.
    http://www.youtube.com/watch?v=qOP2V_np2c0&feature=player_embedded#!

    • BrianC

      Hi

      Never heard of Prof D Harvey before and as you say very thought provoking. Had a look at Chris Harman who is also extremly interesting.

      I hate to go on about this but I believe it all boils down to eliminating fractional reserve banking and giving the power to print money to a few people. The Bank of England and the FED are privately owned and the EU is firmly in the grip of the Germans who are one of the principal owners of the FED. This is the reality that is veiled from ordinary Joe Public living in a delusional world of democracy supposed be underwritten by a free thinking press charged with the responsibility of critical analysis to distill the truth thus act as a guardian to democracy. That is the way things are end of storey. Now we can monkey around tinkering with the symptoms for eternity or get to the basics of determining that which realises the symptoms and take corrective action to create the reality we want to live in or accept that which is imposed on us by a minority.

      The reality of our world is quite simple bury our head in the sand of boom bust cycles delivered by the behest of others to impose the transfer of wealth or get the means to deliver us from this self interested myopic thinking empowering the few all of which will impede mankinds ability to deal with the real world of expanding population and dimishing resources and avoid the inevitalbe conflict that will come about. Who cares what its called Captialism Socialism or Crapologyism or whatever and as Prof D Harvey is saying it is about providing all with the means to live without having your means eroded away compromising the ability of all to live. Bottom line is returning power from the few to the many where those charged with the required governance realise that they are in the service of the people for all the people and not for themselves at the expense of the poeople. If such can be achieved then individuals will be able to access resources to enable them apply their expertise to build their own wealth with the security of knowing the wealth they create be it in the private or public sector economy is theirs and not at risk of being eroded by the actions of the few that gain undue influence and there will be no need for high expertise in overcoming time and distance barriers to capital finance the preserve of the elite few micro finance will be available there and then as required.This will not alone protect private enterprise but also protect and keep a check on government getting out of control. I know ‘ this guy must be on some elevated type of smarties’ looking for a holy grail and a snowball has more chance in hell. JFK tried to do it by introducing a bill to return the rights of the treasury back to the people and six months after signing the documents he met with a bullet. Senator Ron Paul in the US was trying to encourage the same type of bill but as he is not a President there is obviously no need to stick a bullet in him well not yet anyway. Anyway these are just my thoughts and as for our government it is hard enough to stomach being led by the blind but when they insist on also walking backward holy mother of divine you just want to turn out the lights.

    • silentobserver

      I think the critique of David Harvey’s presentation (see link below) does have some valid points, particularly government intervening to save failed institutions. Better to wipe out the wealth of the generation that created the mess, than creating debt for the next one!
      http://www.youtube.com/watch?v=NJGAs2KwoWk&feature=fvw

  24. tony_murphy

    Once the downgrade happened, a process kicked in where companies have to remove money from Ireland based on rules from their Treasury/Finance depts… This is why the whole Green v Fianna Fail war started to erupt. Holiday season is over now. Back to work on 1st September. All hell will probably break loose

  25. wills

    David.

    I would argue that the insiders do have access to money and are milking it like its never been milked before.

    The insiders use the banking crisis, which was self inflicted, to issue bonds to swap for endless amount of cash over there at the ECB.

    If they can do it, why wouldn’t they….!!!!!!!!!!!!!!

    Look at all that lolly they can get with the bonds.

    They creamed the property market and now its the turn of the bonds to be creamed and the ECB is there as the cow to provide the milk.

    These guy’s are hip to the wise and know how to go about moving paper *back to the future*.

    I am amazed by their chutzpah,

    • Deco

      Yes. And oen way they will milk it will be concerning the NAMA scam. Basically those who are well connected will know what is selling and what it’s real value. And in many cases they will be tipping off their relatives. But when they sell to the public what they want to sell to the public they will be selling the rubbish.

      I think we should have a free market approach to the issue. In other words scrap NAMA, and the Bank nationalization program for Anglo and Nepoto.

    • And who is regulating all of this? Transfers in the tens of billions down to Anglo and into Nama?

      Taxpayers because of commercial sensitivity no access to who, what, where, when evidence?

      Revenue and the criminal assets bureau no access?

      Where has the money gone? Where’s it going to? Who gets what, who got what? Item by item, evidence of every farthing transaction please?

      Where’s the responsibility, accountability, transparency, where’s the RAT.

      We have socialism for the banks and capitalism for sucker taxpayers. Banks and the financial insiders have performed a coup détat. And sucker taxpayers are financing it.

      A little music for our cowboy banker FF Government:)

      Anglo going going will soon be gone and FF will be accepting praise for closing it:)

      http://bit.ly/IiN1p

      http://bit.ly/CSEqJ

    • uchrisn

      Wills, I saw a video of a guy making the same point the other day, he said the property thing was to cover up the IT bust, and then the government debt is being used to cover the property bust. The point he makes is what is going to cover the sovergn debt bust. He has the figures too, i think 8 trillion property debt portfolio covered by 30 trillion government debt portfolio covered by ….

      • wills

        Precisely my point. The econ system is rigged and primed for kerchhing factor warp speed. Also, the benefactors of the *kerching effect* couldnt give a rats ass what will cover the Sovereign debt busted flush, ‘cos, they are in the castles on the hills with their pantries stocked and armories stocked and future needs sorted.

  26. Malcolm McClure

    This is the most deeply philosophical piece to emerge from David’s pen, because it touches on the nature of reality. ‘Life is based on facts, not on wishful thinking.’ Nevertheless, David, speaking as a respected scientist, it is worth remembering that Man does not live by bread alone.

    The responses above seem to me to be nudging the debate in a very dangerous direction. If we are not careful we could quite easily talk ourselves into a decline, eventually provoking the end of civilized behavior in Ireland. Let’s try, against all the odds, to maintain a positive outlook here.

    David says “Everything is not under control; in fact everything is spinning out of control.”
    In my opinion the danger lies in the very accessibility via the internet, of quasi-facts like this one.

    Neil Postman said “We believe because there is no reason not to believe. No social, political, historical, metaphysical, logical or spiritual reason. We live in a world that, for the most part, makes no sense to us. Not even technical sense.”

    There are no wise old editors of real facts who understand that human beings can only take on board a limited diet of bad and catastrophic news and opinion. We are being fed a 24 hour torrent of disasters from all over the world and being cajoled by the media to respond emotionally to earthquakes, tsunamis, floods, droughts, financial depression, starvation and sickness.
    Francis Bacon said ‘The desire of power in excess caused the angels to fall; the desire of knowledge in excess caused man to fall; but in charity there is no excess, neither can angel or man come in danger by it.’
    However in the 8th century a certain Mac Oige of Lismore was approached by a student with a question about what clerical attribute he should best acquire.
    Mac Oige replied that he should acquire that virtue with which no fault had even been found. If one acquires charity, it could be said that he was over-charitable; if he was humble he could be criticised for over-humility; similarly asceticism could go too far. ‘I have never heard, however,’ said he, ‘of anyone of whom it was said “This man is too steady.”

    Remember, Do unto others as you would have them do unto you.
    Above all Love thy neighbour.

    Where indeed are all the clergy in this debate?

    • BrianC

      That is seriously deep, too deep for the vibration level of my my brain, so I will still my reality to stick to the essential reality of the right to issue money and fractonal reserve banking. The placing of these levers of power in the hands of a select few delivers enslavement of the many to the will of the select few.

      I am always worried about this ‘Do unto others bit’ What if they are oriented to the perverse enjoy hell fury brimstone stuff and all that jazz. I am not into that all I want to do is make a living and live in peace but the Neocons in the US they seem to like war conflict Dickie Boy and Rumpy lad have been selling the same war mongering message since the seventies and they have to finance it some way and somebody was giving them the money. Even Eisenhower tried to warn us about industrialists and the military ganging up on poor Joe Public.

      Is there anywhere on this Goldilocks planet you can make a peaceful living without being screwed into the ground. Well I suppose that is stretching the imagination too far.

      And yes it would be great to the the perspective of the clergy but I suppose they are wrapped up in their own problems.

    • No harm at all to draw a modicum of Faith and Belief into this mess Malcolm. After all, death is the greatest equity swap of all.
      I posted this at the end of the last article, so please indulge my posting it again.

      “”Deco et al who believe in our State,
      This may well be missed because Davids new article will be posted tomorrow but here we go anyway.
      Getting back to brass tacks and avoiding splitting hairs, our Constitution starts off by stating;

      “In the Name of the Most Holy Trinity, from Whom is all authority and to Whom, as our final end, all actions both of men and States must be referred,

      We, the people of Éire,

      Humbly acknowledging all our obligations to our Divine Lord, Jesus Christ, Who sustained our fathers through centuries of trial,

      Gratefully remembering their heroic and unremitting struggle to regain the rightful independence of our Nation,

      And seeking to promote the common good, with due observance of Prudence, Justice and Charity, so that the dignity and freedom of the individual may be assured, true social order attained, the unity of our country restored, and concord established with other nations,

      Do hereby adopt, enact, and give to ourselves this Constitution.””

      Now, moving on a little bit, we should, as a Christian nation, observe a multicultural right for all to peacefully observe and practice religous beliefs.

      Point number one.No argument else we are dinosaur racists.

      Point two.
      Due observance of Prudence, Justice and Charity, given that the “heroic and unremitting struggle to regain the rightful independence of our Nation” should, in all esoteric arguments, require that our weakest should not bear the burden due to the ignorance of our strongest.

      Point three.
      The aspiration that “”the dignity and freedom of the individual may be assured, true social order attained, the unity of our country restored, and concord established with other nations”” supports one fundamental tenet. That the individual within the State is protected and that the individual is assured of the protection of the State at all times so that true social order may be attained.

      Point four.
      True social order as envisaged has and is being corrupted by the vested interests of State. The individual, in many cases, has lost dignity and is in grave danger of losing freedom, perversely because of the actions of the State.

      I hold that the apparatus of the State is, consequently, acting in breach of Bunreacht na h-Eireann.
      E&OE
      Without Prejudice
      F”"

      • michaelcoughlan

        Absolutely. Could you endeavour to enlighten us as to the road to redemption?
        Having read that sad I know a tear came to my eye and I am sorry but I just had to post the following to remind us of the sacrifice made for us and how we are not worthy of those who made that sacrifice. One thing I would ask is that people interpret the word foreigner as someone who is alien to a peaceful and prospers Republic and not a derogatory statement towards our neighbours. I have left out some of the more unnecessary parts to better make the point in keeping with the previous post.
        IRISHMEN AND IRISHWOMEN: In the name of God and of the dead generations from which she receives her old tradition of nationhood, Ireland, through us, summons her children to her flag and strikes for her freedom.
        We declare the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible. The long usurpation of that right by a foreign people and government has not extinguished the right, nor can it ever be extinguished except by the destruction of the Irish people. In every generation the Irish people have asserted their right to national freedom and sovereignty; six times during the last three hundred years they have asserted it to arms. Standing on that fundamental right and again asserting it in arms in the face of the world, we hereby proclaim the Irish Republic as a Sovereign Independent State, and we pledge our lives and the lives of our comrades-in-arms to the cause of its freedom, of its welfare, and of its exaltation among the nations.
        The Irish Republic is entitled to, and hereby claims, the allegiance of every Irishman and Irishwoman. The Republic guarantees religious and civil liberty, equal rights and equal opportunities to all its citizens, and declares its resolve to pursue the happiness and prosperity of the whole nation and all of its parts, cherishing all of the children of the nation equally and oblivious of the differences carefully fostered by an alien government, which have divided a minority from the majority in the past.
        We place the cause of the Irish Republic under the protection of the Most High God. Whose blessing we invoke upon our arms, and we pray that no one who serves that cause will dishonour it by cowardice, in humanity, or rapine. In this supreme hour the Irish nation must, by its valour and discipline and by the readiness of its children to sacrifice themselves for the common good, prove itself worthy of the august destiny to which it is called.

        • coldblow

          Hi Michael.

          You quote the 1916 Declaration and I share your sympathies here as well as Malcolm’s regard for the Christian values of past generations. However, in the spirit of the article (“But it’s the other way”) the following interpretation of the motives for Indopendence (from Raymond Crotty – I quoted it before here) throws a more prosaic, less idealistic light on matters. Speaking for myself, I wish it were the one way.

          “…That was followed by further legislation which, in the course of a few decades, effectively transferred the ownership of the land from some 10,000 Anglo-Irish landowners to Irish farmers, of whom some 20,000 graziers acquired about half of it. Property in Irish land, which had been confiscated by the Tudors from the clans and conferred on the ascendancy, garrison class, was, in this way, transferred to a larger, but still relatively small, farmer-grazier section of the Irish people.

          “The steam having been let out of the independence movement by the 1881 and succeeding land acts, Irish nationalism, for some decades, followed a desultory course…The fiscal balance within the United Kingdom of Great Britain and Ireland had moved in favour of Ireland before the end of the nineteenth century, and was to continue to do so…

          “Notwithstanding the favourable shift in the fiscal balance, there was unease in Ireland about the course of the United Kingdom’s public finances. Murray provides a partial explanation: ‘A system of taxatoin which has been devised in the interests of a manufacturing country cannot be suited to the inhabitants of a poor agricultural country, where economic conditions and habits of living are in many ways so different.’ More fundamentally: the class structure of the Twenty-Six Counties, where the proletariat had been virtually obliterated, was diverging increasingly from that of Britain, where hte proletariat was in the ascendant…

          “Understandably… southern Ireland was less than enthusiastic about the reform measures introduced by the Liberal government elected in 1906. These reforms… including meagre old age pensions and unemployment insurance. Their financing necessitated the ‘People’s Budget’ of 1909, which proposed higher liquor taxes and a land tax, and was ‘intensely unpopular in Ireland’. Anticipating somewhat the cutting by the Cosgrave government in 1924 of the Irish old age pensions from 10 shillings to 9 shillings per week, and the more recent trenchant opposition to the introduction of a land tax in Ireland, the Irish Naionalist party at Westminster opposed Lloyd George’s reforming ‘People’s Budget’.

          “Discontent with British ‘welfare statism’, which threatened Irish property with the ogre of socialism, or the difficulty of the brightest and best educated Catholic youth had in securing high office in Ireland were not of themselves adequate grounds for secession…

          “The threat of conscription and the resistance it generated burnt burgeois boats and threw the overwhelmingly dominant class inthe land, which for half an century had toyed desultorily with independence, irrevocably on the side of secession.. Once the powerful bourgeoisie were committed to independence, independence could not for long be withheld.”

          • michaelcoughlan

            Hi Coldblow,

            Thank for this though I fail to see the link between Crotty’s interpretation of the motives for the rising and Irish independence and the motive for independence outlined in the document and acted upon by the Volunteers.

            Regards,

            Michael.

          • michaelcoughlan

            Hi Coldblow,

            Thanks for this though I fail to see the link between Crotty’s interpretation of the motives for the rising and Irish independence and the motive for Independence outlined in the document and acted upon by the Volunteers.

            Regards,

            Michael.

      • Malcolm McClure

        Thanks Furrylugs: There are still a few of us who try to uphold the standards of the Land of Saints and Scholars. It was those values that gained us respect throughout Europe in the first place. Lose those standards and we are lost. I should affirm however that I have no interest in the hereafter. Living in Ireland is privilege enough so don’t give up on it, any of you potential backsliders out there.

        Lets ‘Give unto Caesar’ but not forget the rest of that saying.

      • Deco

        Furry.
        not sure if I believe in the state. I certainly beleive that it needs a massive overhaul, to make it faster, less expensive, less nonsensical, and much less lighter.

        Our laws are far too complex. And the lawyers depend on complexity in the legal code to provide them with extra work.

        Our state structure is far too complex. The attempt at decentralization showed how badly structured the state system has become. Just look at the Oireachtas. It has become a talking shop, with Punch and Judy shows taking over. As regards legislation it is only a regional routing hub for nonsense coming from Brussels.

        In addition you have a para-state. And is effectively a para-site. The banks are part of this. So too are the 800 quangoes. Plus all the local authorities which exist to regulater everything in favour of vested interests and the powers that be.

        Our public forums are far too dishonest, and are beholden to commercial interests, lobby groups and individuals who cover up the truth so as to suck the people dry. The whole point of public discussion before the shit hit the fan on the banking system, was to talk around all the important stuff, so that it never got discussed. Public discussion in Ireland was pretty much in the gutter before the night of the bank gaurantee. A lot of it was bull. A lot of it still is bull.

        • I believe in the State Deco. But I believe, rightly or wrongly in a State founded on the principles of the Constitution which, in itself, was written on the back of bloodshed. It took us 800 years to achieve some modicum of independence and in the last 90 odd years, the apparatus of government has gone down the road of aping that which came before, rather than taking a mature step towards a brave new world.
          Those who aspire to lead , guide and administer have slotted into the path of class distinction, as their predecessors were taught, rather than the meritocratic evolution of suppressed ancestry.
          In plain English, they’re neo-Brits looking down upon those they are elected or are priveleged to serve. However, they see it as governing.
          That’s a very basic tenet. Are we served? Or are we governed?
          If we are esentially governed, then save the farce of elections and get on with some Celtic version of Le Roi – C’est Moi.
          Every doting Irish Mother streams her scions into the good pensionable job. Damn right too. Her function is to protect the coop. Ever tried to cross an Irish Mother in full flight? Haranguing councillors and anyon else on the dartboard to ensure her Seanín gets on the Council? A fearsome prospect.
          And only because she has no belief in the private sector to ensure her lad\lass will be seen right in years to come. That’s the legacy of a colonial civil service.
          But that maternal instinct illuminates a serial deficiency in the ability of this country to mature to first wings, to fly free from inhibitions and stand genuinely as an innovative force.
          Our people have done it worldwide and indeed it is unusual to find a major blue chip today without an Irish born national on the board in some capacity.
          Yet the self serving white Nigeria at home still sprays the contact adhesive in an ultimately futile attempt to maintain the ststus quo.
          Ever noticed how many of the notes issued by international finance houses are issued by Irish Nationals or their offspring? We’re being eaten by our own simply because they were treated like dirt here and had to go.
          Payback time methinks.
          This new ascendancy has run it’s course, is contrary to the aspirations of brave women and men and, shortly, will turn on itself as all parasites do.

          But the essence of the State of Ireland, its decent and honest people, it’s traditions and values, its culture and resilience will, for me, continue in perpetuity.

          We stuck 800 years. We’ll stick this.
          F

    • Re ‘The responses above seem to me to be nudging the debate in a very dangerous direction’ No, Malcolm, it is precisely the opposite of what you say. Denial of the facts, censorship of information re financial sector and banking, is much more dangerous than requiring (r)esponsibility, (a)ccountability and (t)ransparency with all the empirical evidence we require that goes along with this.

      All the rest is just obfuscation, falsehood, denial of the facts, criminal hiding of evidence, and I hope your post is not calling for any such concealment of the truth?

      • Malcolm McClure

        cbweb: You have hold of the wrong end of the stick. None of us here, hopefully, is denying the facts.
        The only three weapons that the weak have against the powerful are ridicule, shame and fasting. Choose your weapon.

        The facts are shameful but the powerful have very thick skins, impervious to shame, as Callely has demonstrated. This simply reflects the widespread decline in Irish morality. This decline is of course not unique to Ireland, however it is in total conflict with our heritage.

        michaelcoughlan asked about the road to redemption. Personally I think the Catholic church made a mistake in labelling Pelagian ideas as heresy. Pelagius of course, was an early Celtic Christian. His ideas could be adapted to fulfil modern Irish needs for religious reform.

  27. I might have posted this previously but it’s probably woth anothe look, given Davids call for reality.

    http://www.huffingtonpost.com/rj-eskow/unfree-markets-the-last-g_b_555986.html

    • Great link, from which:

      ‘Free markets should be free. Ideologues can no longer use the phrase “free markets” to describe a system where wealth and political influence are amassed by a few. The public recognizes that this encourages cheating, politician-buying, and the stifling of competition. And competition is the engine of a free market. What they call a “free market” is one where opportunity and growth have been crushed by the power of a few.

      Transparency is vital. The Greenspans and Rubins of the world have long resisted rules that would require public disclosure of financial transactions. Yet disclosing deals, whether through exchanges or other mechanisms, is completely in line with the concept of “perfect competition.” That’s a market model that requires, first and foremost, “perfect information.” Transparency’s not just vital – it’s fair. And what’s a more American concept than fair competition?

      Everybody gets to play. How effective is a marketplace where some people get to buy at one price, others have to buy at another price, and still others never get to buy at all? Whether it’s through so-called clearing houses or other mechanisms, reform can ensure a more effective market with more participants on a level playing field. It’s hard for those who label themselves free-marketers to oppose reform of this kind.

      People should be rewarded for doing things, building things, inventing things … not moving money. America’s financial heroes have always been inventors, leaders, creators. Instead these ideologues have built an economy where an ever-increasing percentage of the nation’s profits are captured by the people who move money around. That leaves less for the people who create wealth and more for the people who drain wealth from the system.’

  28. uchrisn

    A – True story. In a certain South American country a massive banana producer went into financial difficulty. This was due to bad management. The owners family was very influential in the country and so they didn’t care about how they managed the company. Sure enough the goverment used a large proportion of money from their ‘emergency relief’ fund, (funds set aside for disater relief from floods volcanos etc.) to bail out the banana company. They came out on the National News and said ‘ We have to bail them out becuase we need those jobs and we need entrepreneurs like those to create jobs and wealth’. The people bought it because they are not very educated. With my higher level of westernised education I was able to see some holes. Like the owners family are in the banks, government and media.
    Anyway my point is – the bananas are there. They are the countries resource. If this guy loses his company then somebody else is going to take over the plantation and hire the workers and start selling bananas again. However this guy continued in his mis management of the resources being bailed out by the goverment who were brainwahing the public that it was neseccary or there would be a disaster. A disgrace.
    This kind of thing happens in South America regularly where there have an oligarchy and a low educated public.
    I feel it is happening in Ireland where people have a certain level of education but not as high as the oligarchy and certainly not finacially. David Mc Williams is like me in South America. He has the education and can see what is happening. I say let the banana plantation go under and the oligarchy take the hit, the land and resources remain behind and will be used again. Let the banks go under in an organised fashion and the oligarchy of bondholders take the hit, the people and their resources of savings are still there and will be used again.

  29. uchrisn

    By the way I read an ancient asian proverb the other day, It says that if anyone trys to make an excessive profit from food, clothing or housing then diaster will ensue for them and others. Why are people allowed to make massive profits from housing? We are not the United States and housing is a human right. Legislation please.

    • paddythepig

      Why is housing a human right? Shouldn’t you have to earn the right to shelter yourself (except for those people who are physically or mentally unable to do so) ?

      I see folks living close to me being housed in ‘social housing’ who, because they never contributed a penny towards the house, have no respect for it. And you say they have a right to this privilege?

      Don’t think so.

      • uchrisn

        Well basically people need somewhere to sleep, food to eat, water to drink and clothes to wear. If people don’t have these thingsa they may well go into social disobeience and try to take yours. Should people be allowed to make excessive profit from these? Do you think that it is a sustainable system if you do? A thousand years ago in Asia they figured the answer to that is no.

        • paddythepig

          You are merging two separate arguments. The first is whether housing has been abused for profit. It is clear this is the case, no argument.

          The second is whether someone has a ‘right’ to a house. That means that even if they make no effort to contribute towards that house – either it’s purchase or maintenance – that nonetheless they still have a ‘right’ to a house. This is totally wrong, and is abused left right and centre. Who pays for this right? The responsible people, that’s who.

          People do not have any right to housing. They should earn it.

          As for UN declarations. They’re worthless.

      • uchrisn

        Universal Declaration of Human Rights (UN)Article 25.
        (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

        • Gege Le Beau

          I agree with this 1000%, houses should not be commodities, they should be homes for people and families, a place of peace, comfort and security.

          But near impossible to get politicians to pass the correct legislation when their salaries depend on them not doing so. They only way I can think of counteracting this is constant public pressure, then they will do whatever it takes to keep their seats (self-interest rules).

          • michaelcoughlan

            Hi,

            What type of legislation do you envisage?

          • uchrisn

            Michael,

            I have sent an email to a couple of politicians with the following practical suggestions for legislation improvements to prevent a property and financial crisis from happening again, which is something I feel they are not paying attention too. After all most T.D.s have a law degree and one of their primary functions id to introduce legislation to make the economy run in a fair way.
            1. Bring in Legislation to stop developers hoarding residentially zoned land. This legislation has been passed in Shanghai.
            2. Bring in legislation to allow one person own a limited amount of residential properties. This is the case in Italy. I suggest 2.
            3. On a less likely scale, bring in legislation to allow the government have compulsory purchase of land (as when building motorways) when prices are going skyhigh to make land available for first time buyers. This is the case in Singapore which in my opinion has the best housing system in the world.
            There are more things that could be introduced, many ways to have stopped the property crisis, however there was no political will to do it, and unfortunatly still none now.
            Also I believe we should have a cap on rents like Germany and Holland, and even New York – the bastion of capitalism has rent controlled apartments.
            The question is why isnt this being done. The answer is the banks, developers and landowners in Ireland are too powerful and fund the politicans rise to power in the first place.
            How can it be done. Canvassing your local politican is a good way to start. Forming a tenants union would be another.

      • Deco

        Giving people something for nothing sounds great in theory but is a disaster in practice. It is not justice, even when it is in the name of justice. On every occasion it amounts to a PAYE taxpayers footing the bill. Just try and get Bono or Denis O’Brien to go on PAYE. These houses don’t come for free. They have to be constructed by the sweat of other workers.

        We have hundreds of thousands of people living in ridiculously priced houses, and mortgaged to the hilt. And in many cases the local authorities take the tax proceeds off those people to provide housing to people who avoided work during the binge era. That is cruel on those who work hard and who are literally living to work to pay off the enormous debts that are overwhelming this society. In many cases the same people are now jobless but the mortgage is still there to be paid off. The pursuit of justice can be assymetric and in this case has undermined many decent hardworking people. The system does not go to enough trouble to vet out those who are taking the P155 out of the system.

        I mean there comes a point when those who believe in the welfare state need to make a stand in defence of it’s integrity. But quite often the welfare state is taken for a ride by individuals and corporate concerns, looking for something for nothing. And I don’t see anybody making the point that the system is becomming disfunctional. The Welfare state in the US (it does exist) has become both disfunctional and bankrupt through gross mismanagement and farcical episodes like Fannie Mae, and Freddie Mac which acted as market floors for the property market.

        Concerning the UN – we should expect poius, promising statements from the UN, it is loaded with corruption, and it needs to encourage people and governments to keep funding it. All decisions in the UN get ultimate approval from the worlds biggest arms exporters. Enough said there.

        I will give you a prediction. The PRSI that you are paying every week – well when you retire that will all be gone, no state pension. Yeah, that is a shock to everyone. But that is what it will amount to. The government takes a percentage of your sweat and you get an insult thirty years time in return, with the usual litany of excuses.

        • michaelcoughlan

          Hi Deco.

          I agree with you.

        • uchrisn

          Giving someone something for nothing is called charity, even the inventor of capitalism said ‘capitalism cannot work without charity’. There are many people who do not get the same oppurtunities as others, often from circumstances outside their control. What would you do with an unemployed person who cannot find a job. Put them in prison? Where are they going to sleep?
          Also if the universal declaration of human rights is not worthless and in countries where it is ignored there are many hardships.

          • uchrisn

            I agree that there are also people who got all the oppurtunities they need and prefer not to do a job when they can’t find one to match their expectations. So they are kind of taking advantage of the welfare situation in a way. However I think that there are checks and balences for that in the welfare system. Perhaps these checks are not enforced properly and that could be reviewed.

  30. Wishfull Thinking : http://www.mountainart.co.uk

    The feeling now is a real loss deeper than ever before .It’s the feeling of the repeat of the Loss of Atlantis ( now Inish Mor ) where only Plato is the only person recorded as knowing of such a great place in another time before him.It is when all life is divided , one half given back to nature and the remaining half is designed by both man and nature.It is a time of when we again morph once more into Lepracauns -(they are invisible and have a life system
    that holds a time warp of immortality).
    Our Time Warp is a new trajectory from Grannies ‘good room’ .Ours is a damaged state of mind a loss sufferered from malicious prosecution by thoes we elected to power in politics and banking and that we in our lifetime will never recover from .

  31. Folks, there’s no need to become deeply philosophical. Like Dawkins I’d worry about any objective and scientific suspension of disbelief, based on non empirical evidence, that’s used to clamp the brain to deny scientific critique and evidence, in favour of any kind of blind adherence to any dogma.

    I would hold the view for the purposes of debate on economic matters its helpful to stick to the evidence. Difficult I know, because its largely hidden away from us in this socialist bankocracy of ours.

    Our politicians get paid one third more than their MP equivalents in the UK and do less work. Clown gets paid more than Cameron.

    Anglo bill is up to €24.3 and rising to €34 bn and Clown & Co are not just billing our generation but our children’s children for it!

    Mr IamOKbiHorsy from Sinsing, AbleMyyaHadji abode unknown:

    I have two billion euros. I need one billion euros loan, yes?

    Mr Seani Croney from New Anglo: No problemo!

    Mr IamOKbiHorsy: This good bank?

    Mr Seani Croney: We have no connection with previous Anglo losses of €90 bn. We’ve cleaned up that bank and now we are good!

    Mr IamOKbiHorsy: Goodbye!

    The State is bankrupt. Kathleen Barrington, Sunday Business Post, Markets M5, Aug 29, article titled, ‘Banks shut doors to new homes’, describes how a mortgage was refused by different banks to a finance director of a multinational in Dublin and his fiancee who is also a chartered accountant. They wanted to raise a mortgage on a ‘house professionally valued at €460,000′
    and were refused.

    The property, banking, financial, sod(th)em and go(to)morra scam continues unabated through NAMA. Firesale the rubbish and lets get back to a realistic, affordable property prices.

    We’re swimming in property no one can afford. Lets end the stranglehold of speculators.

    Ireland Inc needs to return to reality and fast. Firesale everything in NAMA. End the Anglo/INBS farce. Bring property prices back to realistic and sustainable levels. Get banks lending to business. Bring down rents, farce of crazy rents putting employment at risk.

    The incompetent emperors of this little isle of ours need to be held accountable and responsible for a state twisted to favour a financial and property elite banking scam. Revenue and CAB need to be involved. Anyone in jail for cross collateralisation? One law for the rich, another one for the poor.

    There’s nothing deeply philosophical in the above. Just a simple scam carried out by incompetent shysters, who destroyed our economy and continue to make the destruction worse.

  32. paddyjones

    What David is proposing that the bondholders accept a debt for equity swap is not going to happen. It would be nice to think that this is a quick and easy solution. But the banks are nearer the end of recapitalisation not the begining. AIB needs another 7 billion and Anglo needs another 10 billion as suggested on TV3 last night.
    Bond holders are pension companies by and large and forcing them to accept equity would be morally wrong.
    All the bail outs have been transferred to sovereign debt which will become our biggest problem in a few short months. Our GDP is about 130 billion and our sovereign debt including NAMA will be 130 billion by the end of 2010. We are in Greek territory.
    Once debt to GDP goes above 100% we are in terminal decline as the bond markets we rely on will close to us and then we are in real difficulty.

    • rE ‘Bond holders are pension companies by and large and forcing them to accept equity would be morally wrong.’

      This is the first instance I’ve seen of the ‘moral hazard’ argument applied to bondholders. Taxpayers didn’t gamble/invest/bet funding them with bondholder loans.

      Plus I’m curious to know what you know of the identity of bondholders and their exposure to Anglo. If you have information and data evidence to support your information, please spill it here.

      Incomplete information on the identity of Anglo bondholders arguably probably Helga pension funds, but still a jealously guarded secret. German banks need to be held to account for lack of fiduciary responsibility with Helga pension funds. The Irish taxpayer should not be asked to bail out German bondholder mistakes.

      Moral hazard for bondholders instead of taxpayers? Looks like you have things back to front and you need to do a rethink!

      • paddythepig

        If bondholders are pension funds, then by proxy bondholders are by and large taxpayers.

        I don’t know how you can assume these pension funds are ‘Helga’ pension funds.

      • Deco

        The debts behind Anglo are presumably insured.

        Therefore, is it the rating agencies or the insurance companies who take the hit ?

        These are the parties that are really benefitting from the bailout….

    • StephenKenny

      “Bond holders are pension companies by and large and forcing them to accept equity would be morally wrong.”
      If you’re suggesting that forcing pension funds to accept equities, then it’s rather peculiar, as they already do own equities.
      If you’re simply suggesting that pension funds should not take a hit from their bad investments, then you’re putting in place Too Big To Fail for fund managers of pension funds. This will merely lead to fund managers taking ever greater risks with the funds, hoping to fuel their bonuses even more.
      If you want to save the pension funds from losses, then the obvious approach would be to let Anglo go, and then bail out the pension funds.
      This, of course, would be spectacularly unfair on those with self managed pensions, or just people who are long term investors of Anglo shares (who have the idea that ‘this is my pension’), whether bond holder or shareholder.

      Bailing Anglo out of their past mistakes may solve their current problem, but the much bigger problem remains. What are Anglo (and the other banks) going to do without a property bubble to feed them business? Where wil their profits come from? What will all those staff do? And all those flash new offices?
      If Anglo are declared Too Big To Fail by virtue of having received a bail out, then just like the UK & US banks, their primary goal will be to ensure that they are always too big to fail, and significantly increase their risk levels, and overall size. That would be the rational thing to do, and it’s already happening in the US & UK financial sectors.

  33. Lets not forget the developers who many think have funds salted away hidden from bankruptcy exposure. Many believe they are lying in the tall grass awaiting Nama to offload the commercial property. Then they’ll swoop buying up their own stuff at half to nothing discount bonanzas! Whose watching that goalmouth?

    • michaelcoughlan

      Hi Cweb,

      I have no difficulty with honest developers making a killing on a fire sale so long as NAMA makes a profit. Manny skilled developers had stopped doing anything well before the crash and should have such jurisprudence rewarded unlike what is happening at the moment.

      • NAMA is a waste of time,money and resources, another 250 hired there at huge expense announced this weekend. The t(a)xic loans should be reversed back to the banks where they came from to give the bankers some work to do instead of taxpayers doing it for them in another croney quango. Have a look at http://bankermathews.com/ for more on this. I’ve no difficulty either with honest developers making a killing on a firesale, the sooner it happens the better. I do have a problem with dishonest, incompetent, croney scam developers who’ve milked the system prior to meltdown, who’ve escaped the rigours of the law and are being bailed out again by FF and are ready to do damage again. Btw, how is that garda investigation going down at Anglo? We’re still awaiting the parade of loan defaulters with shared collateral scams, who got loans on false premises, parading before the courts and we’re now 2yrs+ into the meltdown.

        • michaelcoughlan

          Well Said.

          http://www.irishstatutebook.ie/1963/en/act/pub/0033/sec0060.html#zza33y1963s60

          It would appear to me that Seanie and co are up shit creek without a paddle from they way they tried to unwind Quinn’s CFD position.

          • Well Said also, but are the fines still at 1963 rates of not more than £100 and not more than £500? If so, company law is ridiculous:)

          • michaelcoughlan

            Yeah you are correct. I was thinking more along the lines of the prison sentence. It seems to be quite lenient also considering the scale of the loans extended to the 10 unknown investors.

          • Deco

            Assuming that the authorities will do anything.

            1. The laws are usually full of loop holes to the effect that while they sound like a deterence, in practice they operate like an insider’s charter.

            2. The authorities never move against anybody who is part of the same social environment as the personnel running the authorities. The best hope is Mr. Elderfield, but he has been ver quiet since the Quinn Group saga.

            We need simpler laws.
            And we need ready dismissal of regulators who adopt the Neary-esque approach to regulation. (how about a round in the K-club – or will we go to Portmarnock this time ?).

          • coldblow

            Deco. That pretty much sums it up. Let’s not underestimate the importance of snobbery.

            How many ‘well spoken’ criminals end up in Irish prisons? Very few, I would guess, though admittedly the Ordinary Decent Criminals would feast upon them.

            I recently read a book review about looting during the London blitz. The judges there weren’t too impressed by social status, compared to Ireland anyway. Ivor Novello, who wrote the patriotic “Keep the Home Fires Burning”, was jailed for 4 weeks for receiving stolen petrol coupons.

            Reminds me of a bit of a documentary I saw recently on BBC4 (BBC’s ‘good skip’ for programmes) about people who have recovered from lengthy comas, where it is not uncommon to show odd behaviour. One of those interviewed was a tv presenter who said that he was dismayed to find himself talking with his old Birmingham accent again, which he thought he had shaken off for good when he set out to climb socially. “That only lasted about half a second before I got rid of it again” he admitted.

            Re the golf nexus, I was looking at Ross’s “The Bankers” again last night, where he first met Goggins, the new AIB chief, following Soden’s resignation/ dismisssal – for inappropriate behaviour on the company website mind you, not for his inappropriate role in destroying the public finances. Anyway, he did some research on the new man’s contract and found out that Goggins not only had a cool million in salary and bonuses, plus share options etc, but also that AIB were paying all his golf club subscriptions.

            “I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

  34. HAC

    ” HOME ” IS WHERE THE HEART IS?

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

    ” CHANGE WE NEED “

  35. Good article here, but are we invisible,..’lone’ crusader Matthews plus another howler on Pravda RTE this am, ‘Everybody’ shocked at losses posted by Anglo…’Nobody’ anticipated losses as high as this..

    Well shiver me timbers but a large majority of the Irish people have been against the approach taken by FF and Pravda RTE with the banks.

    ‘Everybody’ apart from FF regards the approach taken as the most expensive option….

    Its therefore deja vu to have this view confirmed by news of Anglo losses with more impending through the NAMA white elephant..

    Unfortunately, though the article compares the UK and US approach to dealing with banks, it stops short of outright criticism.

    http://nyti.ms/cAOOoj

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