September 20, 2010

Capital punishment for all

Posted in Banks · 232 comments ·

Let’s cut to the chase. Ireland is on a slippery slope.

The awfulness of this vista is now slowly beginning to dawn on people.

At first we denied it, then we began to feel that something was wrong, but the penny has finally dropped in recent days. Irish bond yields are moving toward 7 per cent – and this is with the ECB buying government debt as the creditor of last resort.

A Greek-style debt vortex is opening before us.

The way this will end is quite straightforward: money will start leaving the country.

Can it be long before depositors start to get nervous about keeping their money in crippled Irish banks?

They will simply run out of reasons to believe a government that has been wrong about everything and has destroyed the economy.

In reality, a major outflow of deposits can trigger a serious crisis, but it doesn’t mean Irish deposits will not be honoured.

The European Central Bank will not countenance any loss to depositors, but this will not be enough to stop a steady drip-drip of cash out of Ireland.

By the way, there is nothing radical about this contention; this is how these types of financial crises usually end: capital takes flight.

In the same sense as the crash in house prices was eminently predictable as early as 2003, the great Irish flight of capital is equally foreseeable.

Here is how it is likely to happen.

The chronology might not be 100 per cent accurate, but it could play out something like this.

In the last few days, the financial markets have signalled that the bond market is becoming increasingly wary of lending to Ireland.

Yields have now shot up as the foreign investors which lend to us realise that the numbers are not going to add up.

We simply do not have enough cash to pay for the banks and keep the welfare state going at the same time.

This is because our revenue take has practically halved in three years. Investors also realise that there is a limit to which the government can tax the people before the people say ‘‘enough’’. Equally, the markets know that, the more you tax the people, the more the economy contracts.

Typically, when foreign investors give up on a government and refuse to buy the bonds of a country, the government turns to the local savers for frantic final funds.

The government is faced with the choice of going bust and not being able to pay the teacher or squeezing a final few hundred million out of the saving middle classes.

In other countries which have faced our type of crises, the state forced local pension funds to buy government bonds or else froze savings, reintroduced capital controls and tried to grab people’s savings.

Remember, savings are very easy to get at.

A ‘temporary’ new Dirt-style tax must look very attractive to tax collectors.

The background noise to such a move will be, first, a flight of capital from corporates which are no longer prepared to keep their money in local banks.

They are not being paid for the risk they feel they are taking.

The wrecked local banks can’t pay more interest than healthier foreign banks because the banks are facing a massive funding squeeze. So if a local bank begins to try to raise interest rates in order to attract new – or keep existing – deposits, people will know that that bank is running out of money. Such a move on deposit rates is a sign of panic, rather than confidence.

Contrast this interpretation of a deposit war with the interpretation that pertained in the boom: when a bank offered higher interest rates back then, it was seen to be a confident market leader in the battle for funding.

Today, it would look like a ponzi scheme operator.

So big deposits will fly out the door. At the same time as the corporate depositors change tack, a different conversation is going on in kitchens up and down the country.

Up until this point, the average working person – with a job – had reacted to the crisis by increasing his or her savings.

As the crisis became more severe and taxes and unemployment rose, people with jobs saved more.

This had the effect of contracting demand and, in the process, contracting the tax take.

This is the polar opposite to what happened in the boom. In the boom, we spent, this increased the tax take and the government’s budget balance went into surplus.

Now, we are saving, the tax take is falling, spending rising and the government’s budget position has ballooned out of control.

Now the average person with savings is worried that the state – which refuses to tax other wealth – will tax savings.

Equally, they are starting to realise that, if the government doesn’t have the cash to plug the hole in the banks, then the small depositors will be the last to find out what is going on.

As we have said earlier, depositors will surely be protected. But some may start to move cash out of the country, just in case.

All the while, the financial markets and financial press are looking at the country and, despite the assurances of the ECB, they see the dilemma faced by us, which is that our balance sheet is ruined.

On the asset side of the national balance sheet is property, which has collapsed in value.

On the liability side of the national balance sheet is debt.

Unlike property values, the debts have not fallen. In fact, the cost of the debt is rising because the rate of interest on the debt is rising at a rate of at least 6.4 per cent per year.

Taken together, it is easy to see that Ireland has run itself up a financial cul-de sac.

The only way out is to bring forward the crisis, rather than wait for it.

We can do this by forcing a debt-equity swap in all the banks, thus significantly reducing the cost of the bank bailout.

AIB needs to be the bank that the government focuses most on, as it is our biggest bank and still faces significant hurdles.

Regarding Anglo, we should tell the ECB and the Irish Central Bank – the two biggest creditors – that the game is up and they will have to take a huge discount on their ‘investment’ in Anglo. As for the subordinated bondholders, they should be told where to go and the other bondholders should be given the number of the liquidator.

If we don’t face the crisis head on, the next few months will witness capital flight and the crisis will come to a head anyway. Better to get on with it.

  1. The almost total paralysis of civil society is the absolute most frightening aspect of this crisis. What has happened that has led to a situation where citizens generally seem totally incapable of having any input into their own destiny? And the idea that the leadership of the country may – in the middle of this – be handed over to a cancer sufferer is beyond surrealism.

    • TheYank

      It’s real simple folks…Ireland gladly drank from the jug of fine wine that was superheated capitalism mixed with gluttony.
      The party is over…Ireland is now suffering from the hangover…we all promise in the sickening haze of the hangover never to do it again…that we learned our from our mistake yet the truth is not that simple.
      When experts including David were screaming out…”slow down…save for a rainy day…this is not right” the commonfolk…yes “you and I” all voted to keep this government in power and now when all economic signals and common sense dictates that we remove this government…we sit and do nothing.

      Your elected officials that took their job on the premise that they WORK ON BEHALF OF THE PEOPLE are shamefully playing politics with the economy and our future in order to position themselves for their very survival after the next budget and general election.

      Did we really learn our lesson?

      Lessons can be easy to gain…but in this case we have the hardest, most austere lesson to learn as the bean counters in the IMF step in on the request of the EU to sort out our mess…much like a parent that wrestles away the mastercard from a shopaholic teenager.

      Pain?…it’s on the way.

      Count on it.

      • liam

        Screw you Yank.

        I didn’t vote for this nonsense, I wasn’t even living here. I am sick to death of these analyses that reduce down to “you got what you deserve”. Is that really what you think when you look at the unemployment figures, the emigration figures, the destruction of jobs, careers and lives, the hollowing out of small towns and the complete loss of hope? You really think that collectively this is what the country deserves?

        And if as you say you did indeed vote for them, then you and others who did so might consider being a bit more contrite.

        • paddythepig

          I agree with the Yank. Collectively, we are getting what we deserve, we elected the administrations who allowed all this to happen. Though there are individuals who foresaw what was about to happen, they were neither numerous enough or vocal enough.

          • liam

            Thats really a remarkable point of view. I profoundly disagree. Collective punishment for the sins of the few is unacceptable to me.

            And the punishment is not for the banking crisis, but for everything that has unfolded since then, which makes it all the more unpalatable. The incompetent leadership of the last three years will turn out to be really what fucked us.

          • paddythepig

            Where have you been? The country is full of people who participated in some way in the mock euphoria. Bubbles do not occur in a vacuum, they need willing participants amongst the public.

            You reap what you sow.

          • Colin


            As a kid in primary school, I loved any break from the monotony of the classroom. I really looked forward to Physical Education, out kicking a ball around the school yard, imagining I was Frank Stapleton scoring goals. We usually had 2 classes of PE each week. The teacher knew we loved PE. However, with Teachers being teachers back in the day when there was no obesity pandemic, they used this power as they saw fit. Any time there was any slight misbehaving earlier in the day, the teacher would threaten to cancel PE for all of us, not just the misbehaving party or parties. Sometimes the teacher followed through on the threat. It drove me bananas. I despised the teacher because of this tactic he employed.

            I dreamed of being an adult, where no one could deprive me of fresh air and exercise and fun every now and again.

            So why am I telling you this? Well, I behaved myself during the last 15 years, I wasn’t greedy, I invested in my Education. Some people, a huge minority of the population misbehaved by being greedy and full of hubris knowing this was driving up prices of houses for everyone else.

            So, please don’t tar me with that thick brush of yours. I sowed good seeds of education and hard work, temperence and prudence. I’ve reaped very little since the governemnt effectively flew over my field and sprayed it with crop destroying chemicals.

            Can I suggest you read the following article.


          • liam


            Thats to me is just just right-wing loonie blather. A relatively small number of people were responsible for creating the bubble, everybody else did what they needed to in the prevailing conditions. But as I have said that is not any longer the problem. The problem is the even smaller number of fucktards in Govt who are now directly engaged in the process of demolishing the economy.

            I’m not suggesting for one minute that the 5 times salary mortagees were anything other than blindingly stupid, however here we are now, three years after the levee broke and we’re still underwater. This is entirely the fault of the Govt, and anybody who suggests that everybody deserves the collective punishment that we will all get for the ignorance and stupidity of Fianna Fail and the rest of them can kiss my ass.

          • paddythepig

            ‘Relatively small’ ? ‘Tiny minority’? Lads come on.

            There is a pyramid of blame. At the top, Seanie, Bertie, Biffo, Fingers, Kenny & Rabbitte (for failing to oppose in any meaningful way).

            Under them, the entire political, banking & regulatory system.

            Under them, the entire property industry, and all it’s hangers on.

            Under them, everyone who voted FF.

            Under them, everyone who voted FG & Labour & Sinn Fein, who tried to outbid FF in the 2007 election.

            Under them, everyone who bought second, third, fourth houses, houses in Ballygobackwards, houses in outer Mongolia.

            Under them, all the scam tradesmen.

            Under them, some blame must go to people who knew what was about to happen, but who didn’t do anything (like me, ahem).

            Need i go on?

            This country is full of people who participated and benefited, and cheered on the boom that never was.

            The idea that a few figureheads are solely responsible is a complete joke.

          • Colin


            I didn’t say very few were to blame, I said a large minority. 50% of voters in ’97/’02/’07 voted FF/PD, roughly 65% of the electorate voted, 30% of the population did not vote, due to being under 18, many of which have grown up and are more likely to be unemployed, so (0.5)*(0.65)*(0.7) = 23% of the population voted for the government we got.

            You need to stop giving yourself and the rest of us such a hard time. We need to reduce unemployment as David re-iterated again last night on tv. We’ve sufferred enough. Pain threshold has been exceeded, no more pain can be tolerated.

            Open your eyes, look around, lives are being ruined, dignity has been taken from men and women willing to work for a decent age but can’t find work. They are not to blame for their circumstances. Anyone with blame has insulated themselves from this crisis because they are insiders and powerful.

          • paddythepig

            Colin, I have always stood up for the genuine unemployed folk, who are trying to get their lives back. Trust me, my eyes are wide open. As are yours, from what I can see.

            What I’m looking for is honesty from our posters, who are too quick to run with the ‘big bad wolf’ theory put forward by our host in my opinion. I reject that theory.

            What I’m seeing instead is evasion, convenient pushing of blame onto figure-heads (though no doubt they are by far the most to blame).

            This is the same evasive mentality which is failing to come up with genuine solutions for unemployed people.

          • Deco


            Correct. This idea that a small minority of the population is responsible is an attempt to sustain the unsustainable practices that are driving us into a quagmire.

            The Irish Times seems to think that is all the fault of Seanie, Fingers and McCreevy. Bullshit. It got worse when David Drumm took over from Seanie Fitz. It got worse as a result of Cowen taking over from McCreevy. And Fingers is small fish in comparison to the problem.

            The entire spectrum of ” infleuntial leadership” of this society is at fault to one degree or another. In particular, IBEC and ICTU have a large share of the blame.

            But you are right, a massive proportion of the population lost the plot. People foolishly beleived all the nonsense coming from media organizations like “Pravda/RTE” and “The Schitzo on D’Olier Street”.

          • liam

            So we have here “relatively few” vs “the country is full of”.. etc. OK.

            Yet we also have “pushing of blame onto figure-heads (though no doubt they are by far the most to blame).” To be fair this is again without reference to actual numbers but would it be fair to define ‘figure-heads’ as ‘not the entire population’?

            Deco, same question for you: if “The entire spectrum of ” infleuntial leadership” of this society is at fault to one degree or another” then how does one justify collective punishment?

            I’ll re-iterate my original point: Collective punishment for the sins of the few is unacceptable to me. I remain unconvinced by Yank’s argument that its my fault.

      • jolly

        Speak for yourself ‘Yank’ I didn’t vote for these clowns but Im pretty sure you did!

      • gquinn

        “It’s real simple folks…Ireland gladly drank from the jug of fine wine that was superheated capitalism mixed with gluttony.” – A lot of people make the mistake on saying it was Capitalism, it was not, it was pure Socialism and thats why the party continued. Remember under true capitalism there is no government interference with the economy or stock market or any other market.

        The market will always go up to high to fast and it must be allowed to correct itself. Not letting the market correct itself leads to massive future problems. It’s like not letting the tide come in only letting it go out.

        I agree with everything else you said and you are correct. I didn’t vote for this government but the majority did and under Democracy while we still have it that means I must respect the decision of the majority.

        To re-iterate what you said. The PAIN is definitly coming in the form of 60% income tax, 60% Carbon Tax, 60% Dirt tax, 60% Corporation Tax.

        • liam

          …I must respect the decision of the majority

          In fact, this Government and this leadership have no popular mandate, so what majority are you referring to here?

          By-elections on hold for two years, Greens voting NAMA in, what kind of Democracy do you think you are living in?

          • gquinn


            Exactly and thats the reason why I left Ireland in 2005 because I knew the crash was coming and I had two options:
            1 Stay in Ireland and get dragged down with everyone.
            2 Leave Ireland and make sure my capital and assets are secure from greddy politicans.

            I like you did not particapate in the boom but I knew if I stayed then I will be punished along with everyone else. This may appear new to many people but unfortunitly this has been many years in the making. People only start to notice what was really going on in a recession/depression.

            It was also and still is obvious that the Government are implementing there 1980′s policy which means asset prices are still going to take a tumble and things are going to get a lot worse.

            Remember look at the World the way it is not at the way you think it should be.

          • liam

            Gquinn, thats good advice.

  2. Kerry Blue abbatoir – Dante Inferno

    David says:

    ‘The only way out is to bring forward the crisis, rather than wait for it.’

    ‘Remember, savings are very easy to get at.’

    ‘The government is faced with the choice of going bust and not being able to pay the teacher or squeezing a final few hundred million out of the saving middle classes.’

    So …..where are the musicians ?

  3. If my mind was like Kown I would imagine this is how it works – just say ‘kick the bollocks of the electorate and the righteous idiots ‘…and sing more refrain to the ‘Lake Pontchartrain – and feel the small people drown as I sing it ‘….and ….if nobody wants to believe me that I know what I am doing I will lift a chair and talk through it as I did at Roscrea College and let them suck .The country is full of idiots .

    The above is our T- Shock …

  4. mcsean2163

    Just back from the US. While reading through USA Today I noticed Ireland and Greece in the same sentence. No mention of the rest of the PIIGS. It appears we’re out on our own with Greece

    Great to come back to a country of bond market commentators.

  5. Deco

    Without sounding alarmist the article is basically telling us that we are running out of time to fix AIB. The fact that FF are having a leadership manoevre, and the GP are 110% behind Cowen – as evidenced by Gormless, is proof that the country’s leadership are in still in dithering mood.

    Next up, Lenihan on TV telling us not to do what is now likely, or necessary, given the scale of the crisis. Cowen will not appear, because Lenihan has more credibility. (that is not a joke).

    Wills is correct. It was all a ponzi scheme all along. An asset bubble brought about by absurdly low interest rates. It is bursting the way asset bubbles always burst – in asset overbuild to the point of overcapacity, with the resulting deflation, when the realisation sinks in that massive amounts of money were invested in white elephant projects.

    Those who had faith in the relentless message coming from the media (our advertising sponsors) are those that are going to suffer the most. The more sceptical you are of all the nonsense that you have been told, the greater your chances of survival.

    • Malcolm McClure

      Deco and Wills: “It was all a ponzi scheme all along”.

      I’d take issue with calling it a Ponzi scheme, which implies that people were tempted to invest savings in a worthless investment by the attraction of high interest rates.
      In fact it was the reverse. People were tempted to increase their debts by the attraction of low interest rates.

      So rather than calling it a Ponzi scheme, perhaps we should coin the term “Iznop Scheme” to label it accurately.

  6. ocallaghanr

    Time to withdraw my savings from the “bank” and stuff it under my mattress? – I think so.

    Run Bunny, Run!

  7. murray

    To take a couple of quotes for the movie “Aliens”

    Hudson (The Irish Public):
    That’s it man, game over man, game over!
    What the fuck are we gonna do now?
    What are we gonna do?

    Burke (Fianna Fáil – The Tramps) :
    Maybe we could build a fire,
    sing a couple of songs, huh?
    Why don’t we try that?


    Later this month the cso will be publishing migration estimates for the year to end of April.This will give a useful snapshot as to how things really are as will the next QHS survey.


    Suggested at the end of the article that Ireland will draw on its pension reserves if necessary. Not sure what to make of it – intentional leak by government to prop up confidence, or just random media musings?

  10. Thermus B. Airgetinin


    “What has happened that has led to a situation where citizens generally seem totally incapable of having any input into their own destiny”

    You probably acted on Davids advice given in one of his posts immediately prior to the Lisbon 2 vote and which was campaigned for and endorsed by the very people who he now says has bust the country through their incompetence. That advice was, and I quote “just vote yes and get on with it” Now you’re suffering the consequences of that madness.

  11. Gege Le Beau

    Waiting for this crisis to finally break is like waiting for a train.

    The bondholders know the risks of the game, were they misled however by faulty data by the banks? Anglo with its debt transfer to other insitutions and alleged creative accounting? Also the financial regulator and his pronouncements that the banks were well capitalised, could the State be dragged through the courts?

    We can’t put our hands up because it would totally ruin us? Pariah ~ Failed State status, so we are trying to bluff our way through the game, but the markets know best and are increasing the pressure, little by little, akin to a medieval rack.

    Should one take any meagre savings out of the bank altogether (I presume depositors are protected in the event of the banking system imploding?), this might speed up AIB and Bank of Ireland’s nationalisation (Tony Gregory would be smiling)….a total property crash expected? (with 500,000 soon to be unemployed and excessive housing stock and few banks lending, saw an ad on RTE last night for mortgages from AIB, last throw of the dice?).

    Situation seems confused to say the least, Clausewitz’s ‘Fog of War’.

    Seems to be a lot more drinking going on in the Dail, similar to those memorable scenes in Hitler’s bunker in the film ‘Downfall’, portent the future perhaps.

  12. wills


    Article touches base on a number of realties crystallizing.

    Bonds going to 7%.

    Gov relying more and more on ECB backstop.

    Anglo black hole, interminable.

    Confusion with Irish public regarding confidence in banking.

    Corporate pull out on funds.

    And, Ponzi pops up finally the penny dropping in the mainstream that the property bubble was a Ponzi scam driven by the banks and the cause of all the above.

    The sum of which = financial cul-de sac.

    Now what……………………………………………………………………………!!

    Now what happens……………………………………………………………….!!

    The *insiders* move to preserve their position’s going forward into a new dawn.

    Thats what happens, below there.


    And, if it involves driving the runaway State bond issuance train, ploughing it straight into door of the IMF with an inevitable sovereign default, so be it, cos, the insiders in Ireland are not going to relinquish power and their luxuries and comfort zones and opulent material wealth for the sake of the countries book balances. Ain’t gonna happen.

    No way in hell is it going to happen.

    Ireland’s cosy insider elite who are in charge, wherever they maybe on the spectrum of power and influence, these people are not going to input change into a rigged economic system if it spells the end of their easy rich living set up.

    What we seem to be left with seems to bethat the only show in town is how much can the insiders in Ireland put the kosh on the outsiders to take the pain to keep their easy living on the hog show on the road without invoking an uprising amongst the outsiders.

    Whether they invoke IMF or not in preserving their positions of power influence and patronage is all discussions of a trifle with these characters as demonstrated in blazers the other night. BC gets all the blame but he is albeit but one amongst many and at least he is prepared not to hide it.

    As for the ECB and IMF one can only but wonder are the technocrats over there at the same game or, merely falling under the spell of the twinkle in the eye leprechaun promise of a pot of gold at the end of the rainbow.

    Fascinating times and keeping us all on the edge of our seats.

  13. Great article echoing what David has been saying and one that requires repeating. It would appear to me international commentators in FT along with Stiglitz, Krugman, Berkeleys et all are all coming around to the same view.

    There’s another aspect to all of this that is ignored in the media. That is, that Anglo figures supplied to us are above board, audited and stamped with authenticity by authorities such as Honan or the Regulator.

    This week Anglo is due to publish its final figure cost to Irish taxpayers?

    Don’t wish to be alarmist, but I’m guessing the figures should be taken with a grain of salt. Or, at the very least, questioned more.

    Do you know exactly where taxpayer money will be spent on the banks. Have a look at:

  14. wills

    Deco, an old fashioned get *rich quick* scam!!!

  15. BrianC

    Very sombre sobering article. Looks bleak. But unfortunately bleakness is the reality chosen for us by others who ought to know better. They are acting out of self preservation and self interest a fact that should not be surprising. However, intriquing when one considers their chosen destiny will lead to their eventual demise loosing the power they so crave but protect their wealth if offshore.

    Changing leaders or changing parties at this point is rearranging the deckchairs on the Titanic. If the Captain can muster his nerve he needs to be ruthless and throw the most burdensome passageners overboard NAMA Bondholders excessive costing consultants etc. The first and second class passengers need a talking to apprising them of the fact that they are now third class passengers and must live within their new means as rations are radically cut.

    Unfortunately the captain has neither the nerve or will and he along with his officers are intellectually challenged on charting a correct course around this iceberg of abyss.

    The third class passengers have already been sacrificied to support the second and first class passangers and crew charged with administering the ship. They live in a blinkered world and occassionally they see a little more light when they have the nerve to go out on deck. The bright reality of that which surrounds in its pure white truth peneterates the blinkers a little more. But even at that they ignore the evidence before them thinking they are in rough waters on a safe course when all around them even the polar bears are telling them they are in perilous waters laded with troublesome icebergs. But they blindly go forth steaming for the big one that will sink Titanic Ireland.

    Tragically the third class passengers have no say and are restrained below in the penal conditions. Worse still even though expert look outs such as DMCW are pointing out the iceberg and the big one ahead they blindly blunder onwards.

    Ireland is a dinghy and the free market seas will deliver its final course and we are all going to need wet-suits.

    Buddha said ‘Igonrance (to ignore), not sin, is the root of all suffering’. and in our present trials ignoring the truth of our economic circumstances means we will continue to suffer until we are delivered to the truth and the markets are telling us that we are living in a lie.

  16. Alamo :

    John Wayne says :

    ‘No way in hell is it going to happen.’

    – those indians can all be shot over my dead body .They aint takin nothing ….keep shooting boy’

  17. Prime Time / Front- Line : maybe now these words will start to have a new meaning for all of us .We will no longer be excellent or important viewers and soon these RTE quangos will become relegated to negative national influence and desperately attempting to survive in their own personal lifestyle that has been propped up in a ponzi scheme all the time .Some day soon the lack of stylish makeup will reveal all their acne.Crioch .

    • PMC

      Tell me exactly what is the problem with these programs?? Seriously??
      Politicians may appear and do their best to avoid the hard questions, but in terms of providing a feel for the opinions of the general public, we’re lucky to have them.
      Most of the reports are well peiced together and it’s a platform that gives a voice to people who wouldn’t otherwise have one.
      If it’s so rigged and corrupt, why would Conor Lenihan and David be sitting on the same panel, when clearly David would run rings around him.
      Notice how neither of them wanted to cut across DMcW when he spoke because they knew he’d bury them.
      Lenihan in the end dipped his toe in, and indeed was buried by David.

  18. Double98

    Why does Anglo even have depositors left? Who would leave serious money with the biggest non bank in the world?

    Even if its guaranteed, would anyone seriously leave their money with Anglo? I mean you’d probably move it to, you know, a bank with afuture and an ability to pay u a bigger yield.

    Unless they were benefiting in some unclear way – have they been told that Anglo can’t release their money? Who are they – are they the golden circle?

    I just can’t understand why you would leave money in anglo?

    • michaelcoughlan


      The answer is a beter interest rate on the deposits underwritten by the Irish state.

      • Yes, I give links above for a fuller understanding of deposits and what they may mean for Anglo Irish. Its a much overlooked subject. Probably large institutional depositors in eg Isle of Mann Anglo depositor accounts amount total to €20 bn attracted there for the large interest rate and guarantee. There is much information regarding such deposits that should be revealed to the taxpayer. Note when you make a deposit to a bank, the money disappears, it only needs to reappear when you ask for it. Breton Woods 111 needs to look at this more closely with a view to changing the rules in favour of taxpayers.

  19. michaelcoughlan

    Open letter to Minister Linehan.
    Dear Minister Linehan. If you can only take one piece of advice from Mr McWilliams the advice in this article regarding the transfer of the ownership of the banks to the bondholders in a debt for equity swap is the action which will save our people and our Republic from a generation of Penury. When you read out your budget speech in the Dail a number of years ago you finished with a call to patriotic action. In fairness to you despite your recent very serious health problems you still turn up for work to do an enormously stressful job which must exacerbate those same health problems. I consider this to be an extraordinary act of leadership and I daresay no one else in the country would demonstrate such an unselfish act especially since you had no hand act or part in the previous administrations who have imperilled our great Republic and most importantly the future of our children, born and unborn. But you are now approaching the moment of truth and what you decide now will determine whether future generations of Irish citizens will be condemned to penury or emigration or both. You remember Minister Linehan when Patrick Pearse issued a similar call to action those who answered that call knew in so doing they were guaranteed the opportunity to stop a bullet with their chest but in so doing knew that from the graves of dead patriots grew living nations. You can be sure that Pearse also knew that many of Dublin’s innocent civilians were also going to lose their lives and property in the subsequent action but knew of the greater good that needed to be done to address the wrongs which allowed the worst slum conditions in Europe to prevail in Dublin for example. Nobody expects you to make this ultimate sacrifice Minister Linehan but what is expected of you is to put the Republic and the Citizenry first and make those responsible for this debacle take the responsibility for it. If you have considerations that many pension funds have money invested in bank bonds and you are attempting to save the pensioners then what may not be obvious to you is that the future generations who will be sacrificed in an Irish Republic debt servicing country at some point in the future will also be pensioners so who are you saving? It may not also be a consideration at this point in time Minister Linehan but those of us who have observed the Fianna Fail machine in action will remember your father and how well regarded and universally respected he was within Fianna Fail. During his career he grew up with the very talented but fatally flawed Mr Haughy and in order to preserve what was right for Ireland your father decided to forgo personal ambition to restrain Mr Haughy’s more narcistic tendencies and how damaging this part of his personality was for all concerned. A similar type of situation has now presented itself to you Mr Linehan which is this; do I save the Bank Bondholders OR the Republic and the its citizens even if I never am allowed to become Taoiseach? If you don’t believe that a debt for equity swap is right then I implore you to review the following link which will show you that a company (INM) which engages itself in a Debt for Equity Swap COMES OUT STRONGER once complete.
    The one guy who has been advising you accurately since all of this began is Mr McWilliams whom I don’t know from Adam nor indeed am I associated with anyone in politics but I implore you to listen to a person who has been consistently accurate instead of those advising you who have been consistently inaccurate. Finally Mr Linehan every morning when you are looking in the mirror whilst shaving you only have two questions to ask and answer of yourself: 1) Will I be more like my father, Pearse and all that was good in previous Fianna Fail administrations and do what’s right for Ireland, our citizens and most importantly our children, 2) and will I put the Republic first and make the bank Bond holders responsible for irresponsible lending to failed banking institutions with failed personalities in charge. I can assure you Mr Linehan if you choose to make the children of the Republic pay for what the failed personalities in charge have done to Ireland there isn’t a snowballs chance in hell I (or any of my friends I would think) will allow you to scapegoat my 16 months old daughter or their children and will leave Ireland (not that I would be missed) making sure neither she or I will ever return to it.

    Yours sincerely and respectfully,

    Michael Coughlan.

    • BrianC

      Says it all for me. Can I add my name.

      • michaelcoughlan

        Hi Brian,
        You are after setting off a light bulb in my head. Thanks for the compliment. I didn’t think that anyone would want to add their name but you have prompted me to suggest the following idea. I am going to print off this in hard copy and post it to Minister Linehan. If anyone else wants to do so and add their name please feel free so long as you print it all and don’t change any of it making reference to the fact that I was the original author. If we don’t start doing something we will be bartering by Patrick’s day.


        • BrianC

          Yes please print it and send it off. We can stand by and idle away doing nothing. We may even accept what John Allen says that the Minister for Finance is more inhuman than human but that is a path he must choose. And maybe a letter such as that which you have penned will help him reflect and help new light shed of a different better way to resolve this debacle. I once heard the Minister talk about his childhood in Athlone and he was very down to earth and above all human. He may just listen and be brave enough to change. Perhaps if he knew that the public would support him he would act. This all may appear stupid to others but anything is worth a try and at least I can point to a letter in the future and say well I tried not to be idle.

          Good luck and we should not give up.

          • michaelcoughlan

            Hi Brian,

            We should never lose sight of the fact that the people who are crazy enough to believe they can change the world are the people who go out and change the world. Happy printing and posting! Any other wind bags out there now is the time to get off the PC and start lobbying you local Representative.



    • michaelcoughlan – I admire your sincerity and intentions and I wished that the finance Minister was human as you are .Alas , you will soon find out the truth and the axis of evil so deep rooted .Nothing can prepare us for what will happen soon.

    • Colin


      I hope you’ll correct your spelling from “Linehan” to “Lenihan”, otherwise it won’t get to him. The only Linehan I know is the Comedy writer based in London called Graham Linehan who co-wrote Father Ted. Is this the reason why who spell the name the way you do?

      • michaelcoughlan

        Thank you Colin. The capability for correcting the post is not available.

      • Colin


        I’m fully aware that its not possible to edit a post which has already been submitted. What I was kindly suggesting to you was to spell his name correctly on the envelope carrying this letter.

        You could copy and paste the content of the post into a new document and then correct his misspelled name.

        Also, creating paragraphs makes a document easier to read. Try to keep sentences short. Get someone else to proof read it and keep an open mind about any changes they suggest.

        Best of luck with it, however, since I’ve absolutely no faith in Lenihan and I fail to see any evidence to suggest he’s either good at his job or would make a good Taoiseach so I won’t be adding my name to it. Its his tribe who f*cked this country up, and I’m not one of them, but its your right to believe in what you believe, just like its a child’s right to believe in the tooth fairy.

    • Gege Le Beau

      Think the midnight garlic summit and subsequent revelations put pay to any possibility of a working relationship, Farmleigh gig likely to the be the last, too many big cheeses upset, can’t have it both ways, not with FF, all or nothing at all.

  20. SHOGUN : We maybe going down the same road Japan went many years ago to eventually kick out the ruling party for the first time as they did recently.They may elect their 5th Prime Minister soon over a space of 4 years now that real democracy.

  21. Tumbrel Cart

    Excellent article again. I like your suggesstion to give bondholders the number of the liquidator.
    Not one more cent should be paid from the empty public to bail out banks. It is time for the citizens of Ireland to make a last stand, however late in the day.
    Meanwhile PWC,NAMA and others are becoming millionaires counting up the mythical value of worthless assets.
    Lets give the world the cost of bank bailouts right now.
    Whatever has been spent so far. Not another cent.
    That is step one in Irelan’s recovery.

    are totting up lost billions

  22. goldbug



    READ between the LINES.


    This is THE ECB’S JOB!









  23. Patrick Hogan today has argued the government must spell out the budgetary austerity measures involved for Ireland Inc for the next number of years, to convince the financial markets how we are to reduce our budget deficit.

    He’s clearly of the delusion the markets require details of further austerity measures that will ruin our economy. He is wrong and should be replaced asap.

    Instead, markets, rightly, are clearly indicating their disbelief Honahan/FF approach to save Anglo and burden the taxpayer with further austerity to fund NAMA (aka half of nothing is 50%) has no credibility whatsoever.

    Honahan/FF and the nonsense mantra issuing from Lenihan/Cowen and recently Dukes will not convince me ‘Black is white’.

  24. Eireannach

    What the masses think is usually wrong. So consider the following statement:

    ‘The IMF restructuring of the Irish public finances is not a disaster, it is the SOLUTION to the disaster’.

    By this I mean that the disaster was the delusion of stratospheric public spending on consultants (with no itemized receipts requested), the FÁS farce, EUR198 dole and proposterously high public sector pay compare to the EU average.

    Now I appreciate that public sector workers may have large mortgages and car loans to pay off, commensurate with their large salaries, but this high pay is not sustainable so what is coming is the SOLUTION to our mess, or the beginning of the solution.

    To think otherwise is to sustain the delusion.

    • Eireannach

      I should add that the bank guarantee and bailout bails of cash are obviously the most egregiously deluded part of Irish delusional nonsense, since it was always obvious that the state was not “bailing out” the banks – rather it was the banks which were “sinking” the state.

      Our government believed they were wealthy enough to do this and continue to pay sky-high public sector salaries, with not one single redundancy in the civil service since the crisis began. Of course, the moment any of Ireland’s creditors actually exam this in any detail, it’s clearly preposterous nonsense.

      Now those creditors are saying “your claims about your ability to pay are phoney”.

      So the coming crash is the SOLUTION to those among us who wish to see reason prevail over delusion. It’ll hurt, but what’s coming is a revolutionary victory for reason, at great expense to the country, especially the poor delusional types up to their gills in debt because they thought the way we were living was “normal”.

      • BrianC


        Very nicely put and hard to argue against for what you say is the kernel of the truth. So we are in a car heading for imminent impact with a wall an inevitable crash. But I do not want to be in the front seat where we are being placed by others. Because Ireland Inc has underwritten the Bank loans Ireland it has exponentially increased it soverign debt. Me personally I want the Irish Government to give this debt back to whom it rightfully belongs and tell JCTrichet and Axel Weber to get lost and tell those who supplied the means to build such debt to accept the risk they engaged and not expect Ireland to be their unpaid underwriters. By giving back the debt then we the Irish public are in the back seat lessening the consequences of the impact.

        And above all you are right Ireland Inc needs somebody to do their dirty work for them and have the IMF tell the public sector nobody can support their standard of living end of storey simple as that because those who we elect do not have the stomach or backbone for this neccessary task. When the IMF come in your problems have just started.

        • Eireannach

          Hi BrianC

          The problem is, the plan for the EU was always for it to be a federation of States, like the USA or USSR, with one central bank, like the Federal Reserve in America.

          We in Ireland – and this goes for other European countries too, still think that we live in a separate nation state, even though we are in the EZ with its ECB, this being the most highly integrated heartland of the EU.

          I lived in Paris for many years and frequently read ‘Le Monde Diplomatique’, being ‘la référence’ for French geostategic thinking. This monthly magazine frequently pointed out that when Germany was reunited, the French were afraid of Germany leaving the EU to create a separate economic bloc in Central and Eastern Europe dominated by Germany. So the French offered the idea of a single EU currency to be DOMINATED by Germany, because as the golden rule states, whoever makes the gold, makes the rules.

          Germany basically makes the rules in the EU from behind the scenes, while France keeps “possession” of the EU civil service in French-speaking Brussels.All the top EU civil servants are French, including Trichet.

          We in Ireland needed to pay attention to all of this long ago, but we believed we were still independent, despite not even having our own central bank anymore.

          Now, with the Lisbon Treaty passed into law, Ireland’s future depends on when Germany, via the ECB, decides enough is enough, Ireland can’t keep paying independent consultants, sky-high public sector salaries and the like when, as a state, it hasn’t got any money coming in in tax receipts.

          “Cut your coat according to your cloth”, and all that.

          Most Irish don’t want to have Germany or it’s bogey man, the IMF, coming in here to tell us what to do, because for the most part we don’t speak German, not French, nor any other continental language, and we believe we are independent.

          Most Irish continue to believe the “Ireland is Independent” narrative, even though WE are the ones who voted the Lisbon Treaty into law!

          We have made our own bed, and Germany, via the ECB, WILL eventually make us lie in it, once they get around to picking up our dossier and reading our public finances in any detail.

          • wills


            Excellent informative info on EU.

            Do think though irelands insiders are all to well aware on the hidden mechanics running ECB and EU and are juicing it for all its worth before the germans and french et all pull the plug on the bond issuance party.

          • Eireannach

            Hi Wills,

            In a nutshell, the Irish government’s public finances are out of control. The Europeans, most importantly the Germans, are increasingly aware of this. Therefore, there will be increasing political pressure on the ECB to stop buying Irish bonds.

            Fianna Fáil don’t want to cut public spending by the massive amounts needed. The ECB doesn’t want to be seen as mean-spirited either. So there is an agreement already made that the faceless institution of the IMF will do the restructuring of Ireland.

            Expect a dole of about EUR130/week at most and cuts in all public sector salaries of at least a further 20%.

            Remember that German guy who spoke out about outlandish pay to IRish doctors? Now the entire German nation a speaking about Ireland in the same way, so the political pressure on the ECB to stop the madness of propping up unsustainable Ireland is going to grow and grow until the curtain finally falls.

            The only other outcome is for FF to make the massive cuts in the budget, but they won’t do it. So the writing is on the wall.

          • Gege Le Beau

            The twin track approach indeed. But the power shift to Germany in the post-war and then post-unification period is something to behold (last 10 years).

            Walking in Berlin last Winter I was struck by the buildings going up, they are a statement of German intent, with its perfect geographical position on the axis of Western, Central and Eastern Europe.

            The Germans will achieve what they have been trying to do militarily for 150 years, dominance and control of Europe, with France tagging along firmly in second place, especially as long as they elect people like Sarkozy, De Villepin may have been what was needed.

            Britain will dance with everyone but has nailed its colours to the English speaking, US (WASP/Anglo-Saxon) world and its Commonwealth.

            Ireland, well after playing high stakes and losing at the table of Casino Capitalism, like a once unruly pupil, we have to sit and listen to the terms and conditions, we just need a battleship off the coast where we can sign on the dotted line. Game over.

          • BrianC

            Hi Eireannach

            Yes you are right so in essence I am not disagreeing with you and would support your elequeont arguements. But the very last thing the Irish Govt can do is gift the bondholders with their rightful ownership of their debt. This is the last act they can make to repudiate the wishes of our future new landlord the ECB.

            We have absolutely no say over interest rates money supply and finally inflation. And when you get down to it the Germany economy are the gold makers the rest are just hanger ons save the very wealthy Italian families who control the insurance world and the very wealthy French aristocracy permantly veiled from the public eye who fully support the dictate of the German dimension ruling the roost hell bent on no inflation. When US economists want to deride economic policies in EU they always make a first port of call to the French economy citing its competitiveness is compromised by its socialistic dimension and so on.

            A decade or so ago Paul Krugman actually predicted all of this debacle in Europe. Now he did not predict the exact mechanics but he did say that the EC could never achieve a true Federal State such as the US because whilst financial capital may flow freely the fluidity of the labour element of the total capital was far less viscous becuase of inherent cultural and linquistic barriers. Recently in one of the Irish daily’s I read an article about how well Ireland did with the influx of Polish workers who were Polands brightest. This would to a degree counter argue Krugman but he is actually correct because only those who are truly fluent can repartriate with the greatest of ease so as Ireland turns back on the valve of emigration we look to English speaking parts of the world so again at the end of the day Krugman is correct.

            Now it is very true to say that we made our own bed so we must lie in it. However, many of us did not have a full hand in making this bed of debacle. Previously I commented about lending and borrowing. If you borrow a little the problem is yours if you borrow a lot the problem is theirs. In the scheme of things whilst Ireland is really an insignificant economy with a population some .08% of the EU I still think it is the bond holders who have the real problem and the Irish government should be encouraged to put its citizens in the back seat and lessen the damage to all of us and especially the future of our children who ought to rank far higher that idiotic bond holders who financed a bubble. If you lend in a reckless manner you should suffer the consequences which will curtail and moderate your future behaviour guiding against reckless thoughtless acts. The Irish bankers who acted to stimulate this bubble should suffer the consequences of their actions. But they are exercising previliged positions promoting fear of international markets refusing to lend to Ireland. Pure dross. The international traders want those who put funding into private banks in Ireland to take the hit.

            Futhermore those leaders of the civil service in Ireland especially the department of finance and the regulatory authorities should also be held accountable along with the political individuals who presided over inflating this bubble. These people were well paid and renumerated to get it right not wrong and it is an insult to the Irish Citizen to come back and say it was an international finiancial problem. That is like building a public builing with no emergency exits and fire alarm infrastructure.

            Hey I wish I could speak fluent french and really get to know the French who seem nice enough people but when holidaying in France often found them a bit arrogant. But a Frech chap told me to take no notice it was a French trait also remarking that France suffered from one main problem and that was there were too many French in France. Man I laughed at that. So whilst they are most likely very nice people and good EU Citizens they would not rank very high on any economic measure intelligent enough to know that Germany was the source of their pay cheque.

            Anyway back to our ECB colleagues soon to be our total masters I do not my getting into the bed of debacle as long as they are made to lay their head down beside me and accept the messy bed clothes they helped make.

            I would also add this. At the battle of Waterloo a German General remarked to Wellington that he was not very impressed with the Irish (and Scots) in the ranks as they were very much rabble. Wellington told him not to worry ‘They don’t runaway’. And I reckon our Goverment is running.

            Support Michael Coughlan’s letter.

          • Deco


            If we are in a hole, then we ought to accept responsibility for it. And some of us have to eat an awful lot of humble pie. I am thinking of the Kildare Street Circus, IBEC, ICTU, RTE, I-Times, various special interests.

            If the Germans are in a position of strength, it is because they work hard, save hard, and expect very severe standards from the German public sector. In the real world you get results for your hard work and equally so for your incompetence.

            We can fix it, but it means a massive generational effort to reform the institutional moras that is stiffling Irish society.

            I don’t think Germany is in charge of the EU. They are in a position of being able to switch off the nonsense coming from Brussels. And other big countries like Britain, France and Italy have clout. So also do heavy net contributors like the Netherlands and Sweden.

            However, you are correct in one regard. Ireland is irrelevant in their concerns. A lot of people need to accept this, and get over it.

          • wills

            Yes this is a sound analysis and difficult to envisage any other eventuality.

          • Eireannach

            Hi again BrianC,

            Regarding the bondholders of Irish banks being forced into acepting a debt-for-equity swap, as DMcW constantly suggests – I think its a good idea. It means the debt burden on Irish citizens is lightened somewhat.

            However, when all is said and done, we live in the EU and the EZ. Our economy will have to get more in line with the rest of the EZ, our salaries will have to come down to the EZ average, and so on. Perhaps we may need to go below the average, since we are so broke due to giving so much money to the banks. This is the seriousness of our situation, and the debt-for-equity idea will only make this transition a little less painful. But salaries, house prices and rents will all be coming down across the board in Ireland, as money flees the country.

            The money will only come back when we can compete with the likes of Greece, Portugal and Poland for inward investment. It’s a long, long, long way down yet.

            RE: the French, if you found them arrogant it’s because they are conditioned to be distrustful of the Brits and Irish, as we are a bit conditioned to be distrustful of them. However, I work as a tour guide of French tourists in Ireland, I spent all summer with French on coaches travelling around Ireland. They love Ireland, and they are disappointed by our nouveau riche nonsense and the Britain-inspired complacency of our attitude towards learning their language, even though most of it studied it in school.

            Most of us don’t speak French because when we go home at night we are more interested in doing other things. It’s that simple and the French know it, hence they can be cold and haughty towards Irish whose ignorance of France and the French is at best complacency, at worst arrogance.

            The Irish who don’t like what I’m saying can leave the EU for AUS, NZ, US or Canada. Otherwise we have to become Europeans.

            All other options are foreclosed at this point. It was always going to come to this, most Irish just weren’t paying attention because they didn’t want to. It’s that simple.

          • Eireannach

            @ Deco

            I’m not saying Germany controls the EU. I AM saying that the French suggested the idea of a single EU currency to the Germans to keep them interested in the wider EU project because they feared the possibility that over time, a newly reunited Germany might leave the EU to create its own economic power bloc in Central and Eastern Europe, incorporating states that had left the geopolitical orbit of the USSR and entered, de facto, the geopolitical orbit of the newly reunited Germany.

            We in Ireland have no idea of the enormity of what took place when the Berlin Wall fell, Czechoslovakia had the Velvet revolution, Yugoslavia exploded, and so on. We were English speakers and as far as we were concerned our culture won the Cold War. We were invincible and we continue to believe this to the present day, as the widespread denial of our predicament reveals. But the geopolitical shift to Germany is about to visit our shores in a very real way, and soon.

            The 1998 Treaty of Amsterdam mandated the setting up of the ECB in Frankfurt, not Den Haag, not Vienna, not London, nor Paris.

            Everyone agreed, and ratified the Treaty.

  25. Thanks David!

    I sense your scenario is much more than only the Irish chapter of this global heist.

    In the grandscheme of things, and if we take the recent events in the Gold markets into account, investors are still very nervous about a possible double dip.

    Emotions are high in the markets and drove the goldprice up. This morning saw a new record high, Gold up 0,6% to $1283,25

    Today an article in the german manager-magazin quotes James Moore from

    (In my own words) The Irish attempts to consolidate debts appear to fail, the weak economic growth is an important factor in this failure.

    Central bank chief Honohan stated that he doubts that the 2014 targets can be achieved.

    I think it is fair to say, the focus is back in Ireland, and it is time to act, time to act NOW! Tomorrow is a important day and will undoubtedly bring more news…


  26. Gege Le Beau

    Lives about to be destroyed in the so called ‘resurgent UK economy’.

    Economics without compassion/social dimension is a complete and utter waste of time.

    • Deco

      The resurgent UK economy is a mirage. The UK has been seriously weakened by the New Labour binge economics under Phony Tony and Flash Gordon. The Con-Dem coalition are a league of condemned. We in Ireland will pay the price for this as well, as the average Briton on the street.

    • michaelcoughlan

      Excellent post as usual. 20 years ago I worked in the UK and my take home pay was 342 GBP per week. I revisited the site a few weeks ago to view the finished project and the taxi driver told me that his take home pay for 60 hrs per week was 300 GBP per week. Very sad. I hope the brits don’t try and blame johnny foreginer!

    • StephenKenny

      UK consumer debt rose by £1Tn under the Labour government, and the economy was very badly damaged in the process. Government debt is now high and rising fast. It’ll take many years to sort it out, irrespective of who’s in power.
      The UK has, in living memory, been in the position of being unable to borrow any more money from anyone (including the IMF), and unable to print more due to the catastrophic effect that a real sterling crash would have had on food and energy prices.
      A sterling crisis was narrowly avoided in the late 1960s (Tony Benn’s diaries give a very vivid view of this, as an insider), mainly by savage cuts and spending the national insurance fund in support of sterling.
      Interestingly, the cuts that Tony Benn was asked by Prime Minister Wilson to plan were on on a par with those being suggested by the current UK government, although in the 60s they didn’t eventually have to implement them (he was asked to plan 25% across the board cuts, if memory serves), but at huge cost to subsequent generations.

      No, the UK has a whole load of troubles of it’s own. The only thing resurging there are the pawnbrokers.

  27. Actually the breaking news re Patrick Honahan mentioned above has an extra dimension of incongruous hilarity.

    We have the Governor of the Irish Central Bank lecturing FF on the need to spell out their austerity measures over the coming few years to bring down the fiscal deficit and calm the markets.

    On the other side, we have FF who’ve been dodging the issue of the budget with their TD’s over the whole Summer.

    One would think they would not have to throw bananas at each other from afar. Honahan believes if FF lay bear the austerity measures, the markets will relent and bond prices drop. He’s wrong.

    FF believe if they avoid dealing with the budget until the last minute, they can avoid public dissent. They are wrong. But they are laying the foundations as usual to make the mess bigger.

    Between them both we get Zero², crisis², a sure comfort to the markets that FF and the Irish Governor of the Central Bank would appear not to talk to each other. BiggerMess²

    Laughter is the only antidote.

    • Deco

      Let’s be honest here.
      The Irish state has not had any austerity measures.

      The pension levy has been shoved hamfisted on current workers to pay for retired workers, in order to distract from the 80 Billion Euro hole in the public sector pension plan. Disgraced clowns like Rody Molloy and sNeary are getting their full pensions. You can rest assured that the nepotists in the state system are not seriously affected by it, and will still end up doing well out of the entire deal.

      There has been a range of stealth taxes introduced to annoy people, and to justify the existence of the oversized civil service, and oversized local authorities. In other words the stealth taxes are being used to cover up inefficiency.

      And some frontline staff on the HSE have lost their temporary contracts. (But the layers of management are still not rationalized, and consultants reports are still being produced to let everybody off the hook).

      Austerity ? No, that is not real austerity. Because if there was real austerity, the state would not be borrowing 20 Billion Euro per year just to sustain the Irish lifestyle.

      Let’s start with the Colm McCarthy report.

      • Eireannach


        Are Irish public sector workers paid more than the EZ average?
        Of course!

        Is it sustainable when our public finances are now the worst in the EZ?
        Of course not!

        German public opinion will force the ECB to stop buying Irish bonds.

        Then the IMF will come in and do FF’s dirty business for it.
        The weasels that are FF will then try to blame the IMF!

      • wills


        Excellent point there, and so simple.

        They could easily start cutting the pay bill with squeezing the quangos into pips.

        But then, how can this be done, one can only shudder with the thoughts of resistance to such a move behind the castle walls.

    • Laughter out of the way: as David says:

      “The only way out is to bring forward the crisis, rather than wait for it.

      We can do this by forcing a debt-equity swap in all the banks, thus significantly reducing the cost of the bank bailout.

      AIB needs to be the bank that the government focuses most on, as it is our biggest bank and still faces significant hurdles.

      Regarding Anglo, we should tell the ECB and the Irish Central Bank — the two biggest creditors — that the game is up and they will have to take a huge discount on their ‘investment’ in Anglo. As for the subordinated bondholders, they should be told where to go and the other bondholders should be given the number of the liquidator.

      If we don’t face the crisis head on, the next few months will witness capital flight and the crisis will come to a head anyway. Better to get on with it.”

      I totally support the above. But I don’t believe its realistic to expect FF to bring these changes about. Unfortunately for FF, ‘Gombeenism’ reigns supreme at the heart of their party. They need to deal with this first.

      We need an Emergency Economic Advisory Committee. There is international goodwill from people such as Stiglitz, Krugman and others; an advisory panel with local expertise, Morgan Kelly, David McWilliams and many others could help .

      The task should be to roll out the changes required within a short time frame of weeks rather than months.

      A huge obstacle is FF, in a disarrayed vain attempt to stop the inevitable, blocking the changes required.

      Both FF and Honahan through the Anglo/Nama delusion are still engaged in a pathetic attempt to hoax the markets and the Irish taxpayer.

      In order to maintain grip on a failed policy, in the face of mounting scepticism from abroad and from the markets, spreads of 6.55%, what will our Anglo/NAMA Gombeens do next?

      • Tumbrel Cart

        FF Should be a proscribed organization. They have bankrupted the country.

        McWilliams is right. Stop the rot now.
        You just need
        1. Banish FF to hell.
        2. Tell the banks not another cent.
        3. Leave the Euro. I thought I would never say this but there is little choice now.
        4. Adopt a new currency at approx 30% devaluation on Euro.
        5. Pay all , yes all bonds in new currency. i.e Devaluation of 30%.

        6. Have a constitutional amendment to sequester the assets of all rogue bankers, civil service derelicts and former Taoisigh and cabinet ministers who have destroyed the country and yet been pensioned off like millionaires to live in luxury.

        It is times for real change. No more tinkering at the edges.

  28. wills


    One thing for sure though, the UK governing system expertsin how to extract the max effect in wealth generation from a private central banking system.

  29. Very well put BrianC. Sums it up pretty well.

  30. Philip

    Governance of Ireland in the new scenario of post bust Ireland is the key question for me. I wonder if we are already 90% of the way towards a centrally controlled vassal state with the French administrators and German executors operating out of Dubin castle while the same lads as usual battle it out as local senate reps for the EU. The elite will as many indicated above, be largely unaffected if not enhanced. They all play and network in the same clubs right around the world. Suck in and get used to it. Getting emotional or vindictive about it in any way is a waste of time.

    Vorsprund durch technik (a monicker created by an Irishman I recently learned) and,…a votre avenirs, mes amis. Ireland as a concept will soon be like the Irish language…an interesting research study for a propective PhD. We are European and we just happen to live in the island of Ireland.

    • Eireannach


      Precisely, we are Europeans first now, Irish passport holder second.

      Our passports, after all, are EU passports we the regional name ‘Éire’ and a nice picture of a harp on the cover. But it’s the same burgundy EU passport for everyone.

      • BrianC

        This most likely means I will have to learn French. Holy God languages is not my thing it took me aeons to even get a little grasp of Deutsch.

        Well we divested ourselves of Irish in favour of Englinsh so we could out wit our adversary in the courts of the land.

        When Axel Weber convenes the ECB meetings I would like to know what language do they use to discuss our common coinage. Napoleon must be smiling.

        • Eireannach


          Il est fort probable que la langue préférée en usage lors des meetings au sein de l’UE est le français. En tout cas, il n’est pas de tout évident pourquoi ça devrait être l’anglais.

          Sorry for being a smart arse above. But it distresses me deeply when fellow Irish people read or hear French and ‘switch off’, or do a kind a ‘gay Paris’ dandy impression best left to the likes of Cowen at 3:00 in the morning.

          65 million people speak this language in Belgium, France and Switzerland. Over 100 million speak German in Europe. So English gets the joint silver medal with French.

          We need to realize that America has more or less left Europe to get involved in other parts of the world where it needs natural resources. That means the English language is not necessary going to be met with subservience on continental Europe for the rest of time.

          Au contraire, à mon avis.

          • BrianC

            Hi Eireannach

            Please I am not insulted or think you are being a smart alec. I genuinely would love to speak French. But truthfully I am just no good at languages.

            I have a friend who lives in Switzerland, he is Irish, speaks several languages, can learn a language in a few weeks. He has a place in Beaune where I have visited a few times and engaged with the locals to the best of my ability.

            But at the end of the day money has no language and above all no loyalty. And I still want to be put in the back seat of the car and if it is a Frenchman or a German driving I do not mind but again I want a back seat and the only boy who can do that is an Irish one by giving the debt back to the bond holders and when he does that they will beg for equity and we can all get into the messy bed in the back seat.

            Anyway you reckon it most likely French. Can you just imagine the craic if all had to be transalted into Irish.

          • coldblow

            Hi Eireannach

            Interesting comments. The odd time I go abroad (céad slán le Budget Travel) I keep an ear open for how different nationalities converse with each other. I’d have a pretty good idea of the different European languages, and it’s noticeable how even those with related languages (say Dutch and German)use English as a common medium. I notice the Europeans are always eavesdropping like this. Whatever keeps you amused, I suppose.

            I noticed that in German airport bookshops, for example, it was much easier to find German translations of English language authors (US, England, also Ireland) than works by native authors. I predicted to my old German teacher once that his language could find itself well nigh extinct in a couple of hundred years. He didn’t disagree, but then again maybe he was just humouring me. I’m not sure about that now, but you never know.

            I can’t remember if it was you or someone else who was making the point once here that French was the language of Brussels and Strasbourg, which made me smile at the time as both belong historically firmly on the German side of the ancient Romance-German linguistic divide, which has shifted no more than a handful of miles over more than a thousand years. There is (or was) a Dutch-language bookshop in Brussels, where as I’m sure you know feelings run high about incursions by the French language, where customers exhanged almost conspiratorial glances with each other.

            If you ever come across it it’s well worth reading La Lorraine Francique by Daniel Laumesfeld which deals not with Alsace but with the Germanophone area further north around Thionville and bordering Luxemburg. It has a beautifully intricate tabular description of the socio-economic factors governing the use of the Lux. language in Luxemburg (oral/ written and informal/ official). It’s a plea for regional identity. Sounds dull, but it’s a classic.

            If they tried to do something similar on any aspect really of Irish life I think they’d give up baffled and bewildered…

      • Inside or outside Europe, how this debt problem is managed is the question!

        Re ‘Suck in and get used to it’

        Ireland Inc, Europe’s ‘Slum Dog Millionaire’ picking through the mess left by Anglo and FF, nope, seems too much like Ireland of the ’50s when Ireland’s writers and intellectual elite in order to survive mostly scarpered out of here!

        Most of the young people coming out of college will have to scarper as well. I’d rather say ‘goodbye’ to FF than to them. In an ideal world I’d like Ireland Inc to leave Europe and be able to stand on its own feet and prosper technologically and otherwise. The reality is, we will probably have to stay. If we left, it would be a case of us being as ill prepared as Scott’s expedition to the Antarctic.

        We do not have to make a mess out of our banking crisis. We can do a Shackleton by using native and international expertise mentioned previously:) But time to act is running out and FF are driving the economy into a wall:)

        So it would appear, we will be left as a vassal state presided over by gombeens like Clown and ‘I will accept the leadership’ Lenihan. Lol.

        For a moment I feared Mary O Rourke and a gang of backbenchers with senior ministers were going to dump us all from the frying pan into the fire!

        Lenihan is actually going to do a tour of European capitals talking up FF approach to banks/Anglo and NAMA. The embarrassment!!!


          Both Almundsen and Shackleton learned from the local experts, the inuit, plus both had a very scientific understanding of their environment.

          Scott ploughed on manhauling remorselessly until he met with disaster leaving the laurels to Almundsen who learned from the local experts and used internationally recognised scientific methods.

          Cowen and Lenihan have been misled into a similar manhauling of taxpayers approach by bankers out to save their own necks at our expense. Their only chance now is to recognise their mistake and alter course.

          I caught Frontline as I had been watching McDowell give an entertaining if sparsely facted documentary on RTE, on Michael Collins.

          It caught my interest as it was giving a forum to unemployed people to speak out. They did and there were Jerry Springer sparks as the audience laid into Conor Lenihan, spokesperson for the government.

          There was really only one fact worth mentioning, that was that the numbers of unemployed increased by the incredible 200,000 over the past 2 years.

          David McWilliams came on for the second half of the show and was ridiculed by Conor Lenihan for his stance on exiting the euro. David spoke very well giving the case against the government’s disastrous policies on Anglo and the banks.

          David should remember Collins who brokered the Treaty that created the 26 counties, not a 32 county Ireland. He should also remember the two great Irish men Shackleton and Tom Crean of Antarctic fame particularly Shackleton.

          Shackleton chose five of his best men for the perilous and epic journey across 800 mls of the Antarctic ocean to rescue the remaining crew of the Endurance, left behind on Elephant Island.

          Ireland Inc, notwithstanding the fact, D’s point, that no country’s economic depression similar to ours, has been managed without the fiscal adjustment required by currency devaluation, the fact is we may not be strong enough to leave the euro.

          There may also be the awful prospect of the hijacking of abandonment of the euro by right wing extremist groups in Ireland. We already have too much isolationism in this country as evidenced by our peculiar Namaphobic experiment.

          Imho I would concentrate on the banks and be prepared to negotiate around the ‘leaving of the euro’.

          If we leave the euro, so be it, but I wouldn’t cherish leaving it to the extent ‘leaving the euro’ may become the butt of ignorant attacks by Conor Lenihan on Fronline.

          Furthermore, Collins had to compromise and no way would Shackleton have considered taking the full compliment of his stricken and weakened crew with him. Is Ireland Inc fit for purpose for leaving the euro? Do we have the raw materials here to attract inward investment outside the euro?

          There fo FF who’ve welcomed all taxpayers with open arms on board the FF Ireland Inc Titanic! Come on Brian! Havn’t you sat down to prepare the budget yet?

          Lets hear your reassurance of the markets with budgetary cuts and Anglo’s final cost to the betrayed taxpayers, betrayed Collins/Pearse et al.

        • Black Cat

          Maybe they are comfortable with English as the common medium because the English Language is German in Origin –

          The term Anglo-Saxon is a relatively modern one. It refers to settlers from the German regions of Angeln and Saxony, who made their way over to Britain after the fall of the Roman Empire around AD 410.
          The Anglo-Saxon settlers were effectively their own masters in a new land and they did little to keep the legacy of the Romans alive. They replaced the Roman stone buildings with their own wooden ones, and spoke their own language, which gave rise to the English spoken today.

  31. Malcolm McClure

    SOS from FF Titanic:
    At the weekend a public servant told me that her brother phoned recently to warn that the government was likely to be skint and unable to pay her salary before this year ends.
    This man is a major player in Irish financial circles in London.

    • Deco

      Presumably you mean the Irish government, not the British government…

    • coldblow

      There are a lot of references to the Titanic here again. Not a good comparison as the lifeboats were for the women and children – not the bankers.

      I base this having viewed the original film (A Night to Remember) not the inferior remake with all that running around (Scooby Doo Meets the Titanic).

  32. adamabyss

    I was reading that 20% of Anglo’s deposit book came from the Isle of Man, so who in the Isle of Man was prepared to invest all that money in the Irish property market?

  33. At last somebody has used the word…..the Government are playing a ponsi scheme.

    What is the difference between what is going on and what Breiffne O’Brien did?

    One of these times the Government will not be able to borrow to pay back the Bond holders then they will go to their ‘friends’ and ‘family members’ the EU, the USA, the IMF to sort them out.

    Breiffne O’Brien ran out of friends will the Irish Government?

    The day is coming when the Govenment announces to all who are being paid by the State that they haven’t the money to pay this months salary and you will all only receive 50% of what you are due. Or 30%

    Tick tock, tick tock, tick tock

  34. Eireannach

    Geopolitical power changes its centre of gravity from time to time.

    Welligton defeated Napoléon. The international bankers thereafter made the City of London their centre of power and financed the British Empire’s rise and rise throughout C19.

    In 1871, German united. Whilst Britain and France were Atlantic/Overseas powers, Germany became predominantly a continental geopolitical power, rivaled only by Russia and Austro-Hungary.

    WW1 and the Atlanticist 2, having signed an entente, attempt to cripple Germany’s rise with the terms of reparation of the Versailles treaty. Germany economically collapses. Talk in Germany is of the Jewish banking elites in Paris and London trying to stop the rise of a nation.

    WW2 ends, and Russia emerges as the great continental power. Germany is divided.

    Russian command-and-control economic practices lead to insurmountable problems. Eastern Europe tears down the iron curtain. Germany is reunited. The USSR breaks apart. Russia largely loses its sphere of influence in Europe, Serbia and a few others on and off notwithstanding.

    The EU rises from the ashes – fastforward to the reunification of Germany and the Treaty of Amsterdam (1998). The ECB is set up in Frankfurt. The eurozone is formed.

    The c20 balance of power moves away from the margins – the British and to a lesser extent French Empires until after WW2 and Russia until the collapse of the USSR, and back towards the geographical centre – Germany.

    ECB interest rates favour Germany and those whose economy is aligned with and moving in sync with Germany. Ireland goes off on a tangent-bubble which makes a fortune for those who sell at the top, is a disaster for those who buy at the top.

    The ECB underwrites the emerging integrated banking architecture. The process of further integration is messy given the different speeds and tangents that individual countries of the EZ have been moving in. Spain’s “boom” in construction leads to bust. Ditto Ireland. Greece is found out for lying and thus its integrity is called into question.

    No leading politician in any of the PIIGS seriously considers leaving the EZ. All understand the wider geopolitical picture.

    Instead these politicians just try to manage the expectations and hopes and dreams of their electorates which, to the extent that they were unaware of this broad historical geopolitical trend away from the margins and toward the centre, are now found out to have been delusions.

    Costly delusions.

    The final delusion is that there is any amount of foolish last wishes that can be countenanced ie. let’s rejoin the Commonwealth, or even the UK! (like Britain wasn’t also caught on the horns of this too, I mean FFS!).

    The last refuge for the escapists/delusional types RE: this new alignment is to “buy into” the Australian Dream, or NZ Dream, or Canada Dream, or maybe an Obama-inspired American Dream 2.0…

  35. Eireannach

    To conclude my rant, the British royals are of German extraction, the Pope is German and the Rothschild dynasty, so instrumental in the rise of the City of London after Wellington’s victory, were behind the selection of Frankfurt as their new HQ

    • BrianC

      Hi Eireannach

      Based on your comments I’d kinda take it that you are swinging with those who favour Genaral Albert Pike and that sort of conspiracy stuff.

      Me personally my hobby horse is trying to convince the the world that we need to dispense with Fractional Reserve Banking. Well I can always try and hope. Mind you many of the boys above might think I am curving about with the fringe element crew.

      Pike was an interesting guy he also spoke several languages and fluent in French.

      • Eireannach

        Hi again BrianC

        No, I wouldn’t subscribe to Albert Pike’s point of view, or put much credence in the illuminati or any of that. I wouldn’t be francophile, even after years of seeing the world through the eyes of ‘le Monde Diplomatque’, nor deutschophile (I’ve visited Germany a few times but my knowledge of German language and culture is not very comprehensive. I used to love the BBC when I was younger, but I don’t see the world through British eyes either, and I wouldn’t see the world from an Irish nationalist point of view, hence my emphasis on our need to brace ourselves for deeper integration into Europe.

        I just think we live in changing times, that America will seem like a country further and further away, but the EU, ECB and so on will get closer and closer to home and be a factor more important in reflecting where we are now and in the future in Ireland.

        I intend to live in Ireland for the rest of my life but I think it will be a region of Europe in the long term, with a multiethnic European population mostly, from all over Europe. I’m looking 20 years into the future or so.

        I don’t know whether it’ll be a change for the better or worse. I just think it’s started to happen and is unlikely to happen. I don’t think people in Ireland think about what a Europeanized Ireland will be like.

  36. paddyjones

    Firstly we are already committed to repaying bond holders and depositors such as the ECB ( they have 25 Billion at Anglo ). I for one hope FF stay in power for another 2 years so that they are forced to clean up their own mess.
    As for savings leaving the country other than depositing money with Rabodirect the only other option is to jump on a plane to Holland or Germany and set up a bank account there. For the large deposit holders this is an option but for people with low savings their only option is to try and find somewhere safe such as the post office or credit union.
    I chose Rabodirect , they have a great range of equity and bond funds to invest in. That way you can have an Irish bank account ( AAA rated ) with your money invested abroad.
    It was good to see David project into the future, he normally talks about the past. With Irish bonds becoming junk status the writing is on the wall. International bond holders are long term thinkers they dont think about the “now” but rather think into the future. Irish bonds are only for the real adrenalin junky bondholders. These guys are not thinking straight and are juiced up on the thought of 6.55% over 10 years. The rating agencies will be making downgrades and giving negative outlooks even more so now.
    I would like David to give us an insight into the future more…What will happen to property values? What will happen to interest rates? At what point does the EU/IMF come in? surely with bond rates at 6.55% it must be soon.

    • paddyjones – any bank under licence of the finance minister of this state is questionable because the minister has greater powers over your bank balance/ investment than you care to credit.
      what did you say is aaa+ ? think again.

  37. Garry

    No government is going to willingly admit bankruptcy until they are forced to do so. Very few organizations would, the banks didnt, Waterford Crystal didnt, etc etc etc

    It will take an external event to force their hand. Cash will have to run out before the game changes.

    I think they have planned ahead and have a good few months cash and will be able to borrow some more.

    and theres always this

    People are wasting energy wondering if bond rates of 6% would result in the IMF being called in etc….

    Nothing to say it can’t reach 10% is there :) Im not aware of any rule book… but im sure theres a limit

    So its wishful thinking because those in charge are more worried about Biffos “hoarseness” than how to pay the bills next year. The bills are paid for this year, sure havent they sold bonds :)

    This thing has to run its course, Patience.

  38. Gege Le Beau

    Capital punishment was watching McDowell going on about Collins, a man he has nothing in common with, neither in person nor policy.

    Thankfully, time is limited otherwise we’d have to go on suffering the unsufferable.

    McDowell stated: “In this Republic, we make all big decisions throught the ballot box”……hmmmmm, let us try a minor thought experiment and test this statement……….

    NAMA, bailout of Anglo Irish Bank (plus general bailout), the harder aspects of the Budget (reducing social welfare, public salaries, benefits to the sick, disabled), use of Shannon, right of foreign intelligence services to question Irish citizens on Irish soil (which McDowell signed), Shell pipeline…………

    Sure Michael, sure.

    • Deco

      “In this Republic, we make all big decisions throught the ballot box”.

      Yes, and if the decisions are not satisfactory for the real government (IBEC/ICTU/Brussels) then you get told to go back and make that decision again….and again…

      McDowell never told us what Collins would have made of that did he ?

      • coldblow

        You forgot media/ opinion formers: divorce and abortion re-runs.

      • We do not enough look at the banking disenfrancisation of taxpayers with socialism for the banks, through the lens of what the founders of this republic intended for its people.

        To be fair, McDowell, at one point, plaintively echoed this by calling on politicians to act in accordance with the will of the people and their greatest good, and not allow themselves be swayed by other considerations…

    • coldblow

      I picked up on that one too. Did you also get the irony in the description of Collins’s guerilla outfit? It was also a very good description of the Provos’ campaign in recent years.

      The programme was disappointingly dull. Reeling in the Years 1921-22, but without the music (probably just as well unless you are given to drawing foom renditions of Moore’s Melodies). Better to watch Mise Eire or Saoirse: same footage but with a stirring Ó Riada score, stage commentary (akin to a staccato Gaelic version of the present-day C4 drawl-commentary) and atmospheric mythic feel (very important that). All presented as as if there was some ponderous Hand of Destiny inevitability about it.

      Did McDowell mention money at any stage? Or property? I mean, I presume it had an important role somewhere in the proceedings (Follow the Money and all that).

      Anyway, what is this Collins thing? Am I missing out on something here? Looks like: simplistic narratives for the proles. I suppose the hope is for some of the charisma to rub off on himself as he plots his own return to the field.

      By the way, the mrs heard David in praise of Mary Robinson the other night, so is there a programme about her on the way too or was one of us not listening properly? Posh country girl makes good? Spiced up with breathless rumours about young London society bucks eager to risk it all on just one night in the arms of Noddy? Or is this kind of thing ok for Mícheál but not for Máire?!

  39. Mumlo Trader

    Oh come on lads, haven’t we gone far enough with all this doom and gloom and all this talk of how we are all going to spontaneously combust and Ireland is going to sink into the sea??
    We were all saying this last year when the fundamentals were even worse but guess what – the stockmarkets world-wide rallied 85% in one year!
    You will never see that again!
    S&P has just broken through another major resistance. And you wanna know why?
    Because every naysayer, doom spinner, angel of death out there, who is absolutely convinced the world is going to end, continues to throw shorts at the market and they get pulverised pushing the market even further up.
    Yes David, you were right in 2003 that the market was going to crash. I wish everybody had listened. Our personal debt was 8 times more than our GDP. As always, the poor hardworking innocent man and woman on the street is left holding the bill. Always happens. It is unbelievably sad.
    But that was 4 years before the market did actually crash. I also know of people who made a killing in those 4 years.
    All this doom and gloom was of benefit when the market was flying.
    However, it is not helping now.
    It’s like warning the survivors of the Titanic who are frantically holding on to any piece of floating timber of potential icebergs out there.
    Yeah. Thanks. That’s helpful.
    I have just come back from a recruiters convention. There are a lot more jobs out there and its gaining momentum. I have heard of houses for sale where people are actually outbidding one another. It’s not all doom and gloom. Even if we do have a double dip – so what? We just survived the first one. So we learn to speak Greek for a while. Even the Greeks are now selling bonds for fun.
    Yes the 2nd shoe may fall. Who is going to pay back this debt? Ghost estates? AIB?
    But everybody knows that. It’s time to start motivating the troops so we can at least put up a decent fight. We have a duty. The shorters are getting burned. And it’s because of us

    • Eireannach

      @Mumlo Trader

      Can the government balance it’s budget? It’s spending is running away from it’s income at an astonishing rate of knots.

      If FF can turn this around immediately and show how they will eventually balance the budget, then the EU/IMF will not come in to Ireland.

      I’m not a betting man, but what be the odds that FF would save the day yet?

    • StephenKenny

      The markets have been really weird for a while now, about 2 years. Volume is simply nowhere yet the market is going up, the retail trader is simply completely out, leaving a handful of major brokers, and the hedge funds, in all the action. High volume days are mainly down days, which is also a bit weird. In fact, it’s clear that the markets have completely delinked from the economy, and no longer reflect anything other the competitive natures of the institutional traders.
      The NYSE have now stopped publishing key participant data, so it’s no longer possible to work out who’s doing what, which is also completely weird. The shorts are being burned, but it because there’s a lot of really weird stuff going on – and it’s got nothing at all to do with supply and demand, or confidence.

      After a few, in the pub round the back of the convention hall, the average recruiter may admit reality, but at the convention itself? are you kidding? have you never manned a stall in such an event?

      The economy is banjaxed, and we just have to deal with that. Let’s get it over with, and admission that there is a real problem is the first step.

      Then ……… now that’s the really interesting bit. What do we do next? What sector? What will grow? Can we raise a few euro for an SME export trip to selected German retailers/importers? What retraining is worth looking at? The German’s are big on formal qualifications, so maybe a Prince 2 course (for the management minded)….

      David’s right – let the fan take the hit that’s inevitable, and then we can get on with the good bit – growing our way out.

  40. “”Remember, savings are very easy to get at.”"

    This to me is a chilling comment from the man who has consistently been proved correct in all predictions.

    Not because David studies the entrails of a goose or employs some other fanciful method of economic soothsaying ,such as listening to the ESRI, but by cold analysis of fact and the application of trusted tenets.

    This forum has discussed the protection of personal savings as far back as 2 years ago.
    Thus it’s now high time to place the remainder of the Furry Money beyond the reach of these latterday highwaymen we’re cursed with.

    Since Germany seems to be ruling the roost, I’ll be taking a spin over there to check this out.

  41. gabe

    Bank crisis or no bank crisis, the plain fact is that the Irish people, under the inept stewardship of Fianna Fail, built up a health-care system that they couldn’t afford, an education system that they couldn’t afford, a highway system that they couldn’t afford, a quango system that they couldn’t afford, a professional class that they couldn’t afford, a legal system that they couldn’t afford, a civil service that they couldn’t afford, a social welfare safety-net that they couldn’t afford and above all a governance system which not only could they not afford, but which guaranteed that the politicians would focus more on keeping their snouts at the trough (including the opposition) rather than making a decent attempt to run the country in a sustainable way. Ireland must be one of the most over-governed countries in the world (if we include county councillors and their beurocracy as well) but what were they all doing to earn their bloated pay and expenses all this time? Because the legislation which could have prevented the disaster was not passed, nor was the legislation to modernize and oversee the commerce of the country passed……….so Sean and the boys cannot now be brought to book.
    Oh, and even if the bail out of the banks is “manageable” there is still the welfare state to be reduced to a level which can be afforded. Walmart have a slogan: “We roll back when we can.” Well, unfortunately there’s going to be one huge roll-back in the Irish system to the levels and standards we saw more than 10 years ago. Maybe then, this state, like most other well-run states, will be spending roughly what it takes in. And if the doctors and the lawyers and the consultants, and the estate agents have to be paid by barter, then so be it. And there’s no point in talking about emigration………… there’s nowhere to go now!

    • liam

      XYZ that we couldn’t afford. Hmm… its true that they bribed the public service and threw money at silly projects, however I’d argue that we could have afforded all of the above if we had decided to make it a priority and with all the cash thats was about there is no reason in the world that Ireland couldn’t have had long-term sustainable high levels of spending on public services and infrastructure.

      Have a look at Norway, Denmark, and other similarly sized EU countries.

      But. Coulda, woulda, shoulda. In the end, didn’t.

  42. Dyson Economics : So what is it ? Our initial perception is that it is ‘Innovation’. The real truth is, that it SUCKS .If you hold it the wrong way you might loose your manhood .
    The Full Moon is Thursday and the feeling is that we as a sovereign state are ‘up the tube’. Today, is a moment we are experiencing as our house is decluttering and cleansing its toxic debts and recycling itself to an incinerator or a landfill .
    We must ask ourselves ‘what are we throwing out ? Do we have a choice? What will we have left? Are we ploughing into the midlands? Where does it all STOP ?
    Dyson knows every dirt that man ever made and is not discriminating and if you are within a asses roar of its dysonetrics , ‘your gone’.It should form an essential tool in future Irish Politics and be used by trained personnel.
    Today , marks a moment , marks the colour of your pocket , marks a new leaf , marks every page for the rest of your life and your children.

  43. Anybody who saw Brian Lenihan with Cowen the other day think Brian looked awfully unwell, worst I’ve seen of him over the past few months? I hope the stress of office is not damaging his health. There surely is a case to be made for the appointment of a shadow Minister for Finance, or Co-Minister For Finance. Perhaps his brother Conor Lenihan could be co-opted to such a position, to make sure he is taking care of his health and to help with the more onerous aspects of the job. If Brian’s health deteriorates, surely our reputation internationally, as a barbarian nation unconcerned with protecting the health and welfare of our leaders, never mind same of taxpayers, will only increase?

  44. Deco

    Print, Baby, Print. (the Krugman Doctrine).

    Here is the interesting bit. Some insider in G-Sucks thinks that the US Fed will print up 30 Trillion. This matches the statistic described by Hugh Hendry as the scale of the “wealth that has evapourated as a result of the deleveraging”. Now this is terrifying, because you just never know where it will end up. Possibly oil, metals, old wine, you just never know. And no doubt GSucks will profit a lot of it also. This is the price to make sure that there is no “regime change”. Basically, it is necessary to keep “the manufacturing of consent” at the centre of US society.

    Unimpressed with this we can expect a line up possibly including OPEC, the Chinese, India, the Germans, possibly the Canadians also.

    To be honest, I don’t know which is harder to beleive, this level of money printing, or the Irish state running out of cash. Either way, the outlook is disastrous.

  45. Tadhgd

    The times they are a changing…lunch yesterday in The Clarendon — main course with soup or dessert for Euro 8.95. Margins must be squeaky thin at that price but fair play for having a go. The missus and I had dinner Friday night in Pizza Stop Ristorante Italiano on Chatham Lane. It’s a flawed favourite of ours from when we started going out first. The tables are squashed together but the food is tremendous value and the atmosphere there is plugged in to a version of Dublin we like -welcoming and friendly. Its prices looked unchanged in 7 or 8 years. I hope its rent is too. So value is back on the menu – at least in some places.
    I guess that is the silver lining. The cloud though is dark and stormy. It was actually distressing to see so many homeless people. Grafton Street was like an al fresco hostel with concrete mattresses for beds. I would estimate between 20 and 30 people walked up to me and asked for spare change over a four day period. I don’t blame them for it, and sometimes obliged, but it was genuinely awful to look in their vacant eyes where dreams and hope should be. I don’t hold out much hope for them. There is being on the outside and then there are outsiders…
    Sunday I caught up with the guys before the match. Don’t come back, Country is screwed they say. I very kindly sit on the fence. Headed down to our seats….only to be told that there was a misprint and one seat number doesn’t exist. A steward with a bit of savvy allows us to sit together and a bemused Down fan is relocated elsewhere when he arrives. Before,during and after the game the Down supporters and team show real decency and class. Lessons to learn, I think, still from our Northern brothers.
    We have Sunday dinner with the folks in the Mona Lisa on D’Olier Street. No veg but a bonus point for free Wi-Fi. Rejoined what are now very drunk Cork fans celebrating victory. Now feel like an outsider amongst my own crew. What is it about seeing people hammered that is ,in the truest sense of the word, so jarring? Like looking in the mirror maybe. I loosen up a bit and have a few scoops before heading back to the wife and our hotel.
    Monday I decide on the Aircoach to get back to the Airport on the grounds of free Wi-Fi and due to too many bad experiences on Dublin Bus. One Aircoach every 15 minutes apparently. After 25 no Aircoach so I ring the office. Sorry for the delay 5 minutes she says. 10 minutes later still no Aircoach. Panicing a bit now I hail a cab and reluctantly tell him Dublin Airport. Get to Airport and he says he doesn’t take credit cards. Bank machine inside he says. In I go…first ATM out of order. Second ATM fit for purpose. He very kindly has left the meter running. Too rushed to argue I pay and go! A bit annoyed with that but had a good experience Friday when another Taxi driver returned my bag to the hotel after I left it in his car earlier that day. Like referring decisions it must even out over a season…for the every day citizens of Ireland it must feel like they are due a few decisions themselves.
    Expect a few more to quit the game and join me plying their trade on foreign shores when they realise that there is no man in the middle. Even if there was he has no intention of changing his glasses…

    • Deco

      The taxi-driver who would not accept a credit card was probably avoiding tax. But, look, it only gets wasted on nonsense like the National Convention Centre, etc…

      I can see where you are coming from with regard to Grafton Street. It is not just the homeless. A lot of formerly middle class people are going hungry, and there is not a word about out of sense of shame and the need to ‘keep up appearances’. This is something that was not seen in a very long time.

  46. Malcolm McClure

    Today’s bond issue was oversubscribed

    The Irish 10-year bond yield fell 14 basis points to 6.40 percent as of 10:20 a.m. in London, narrowing its premium over bunds to 380 basis points.

    Panic over for this week?

    “A spokeswoman for the central bank in Dublin said yesterday that a final cost estimate for the Anglo Irish bailout is at “an advanced stage of readiness.”

    The next hurdle to cross?

    • The dance on a rope, high up in the air, between ‘austerity measures’ and ’social peace’ is performed to the tune of market propaganda, EU politics and a war of words.

      We are bombarded with the notion of importance to safe the banks, all banks, at all cost.

      Different economic schools compete for the public ear and one has to make up his mind who talks sense. There is no universal truth in any of these different schools of economics.

      Banksters on the international stage continue to play their game, in fact, they never stopped! I consider Basel III as too little too late and most definitely not enough.

      Of course, this is a war where Ireland has little or no troops on the battlefield, other than the corpses hidden in Anglo Irish Bank and a decade of fraud and scam hidden in the accounts and off shore activities of all banks.

      The ex eastern german secret service, Staatssicherheit, known as STASI, created a monster with approximately 170,000 Informers, and 100,000 full time ministry workers by 1988, one year before the wall came down.

      Three years after that historic event, the STASI files were opened to the public by a sudden federal republic order in 1992.

      The FF lead Ireland created a different monster of servants in this country. Their purpose was not to spy on the people, but did function as a net of power maintaining bureaucrats, a politically motivated net where nepotism and party interests ruled.

      The reason I say this, is not to directly compare the Irish politics with STASI methods, but to highlight that Laws can be changed, and transparency can be achieved.

      Having said that, the Irish Constitution is the main reason for apologists in the legal eagles fraction why we do not have whistle blower protection in Ireland for example.

      The demand of the Irish people for transparency into the matters of our banks was answered with behind closed doors investigations, a PR stunt of a Raid in Anglo Irish offices in 02/2009 has revealed what? To date, zero results. The hopelessly understaffed office of the director of corporate enforcement was given the task to dig through millions of documents. The results? Zero.

      Dirty games? Who would not be forgiven to think that crooks and special interests are playing dirty games in the Light of this secrecy and insider business.

      I am one of those who think it is time to open the files to the public! I believe we need a public inquiry into these matter, it is long overdue…. I believe this is the real hurdle we have to cross in an attempt to change what is unjust Malcolm!

      • wills


        Fascinating and spot on regarding first 3/4 points on the banks been sold to us as immutable.

      • Deco

        I have met people who lived in the old DDR. They give you a fascinating insight into life were politicians run everything.

        They also educate you on the stupidity of believing what you see in the media.

        I think the film “Good-bye Lenin” captures it well.
        We need an Irish version, call it “Good Bye Ditherer !”

    • Now there’s an illusionist, wizardic conjuring trick of note. To ‘give a final cost estimate’ they’ll need to do the LTEV(Long Term Estimated Value) trick.

      This is based on the expansion of the universe over 1000′s of billions of years leading to the eventual breakdown of matter, when Anglo’s debt, in spite of its exponential function nature, will have deteriorated to nothing.

      The good news is, we will not be around to see this.

      Also, there’s a little ‘go away’ present for those emigrating, not for the 14.3% or 400,000+ unemployed alas who will remain, the ‘go aways’ will not be saddled with the debt.

      Oh the rejoicing success of our bond market auction of Irish taxpayers entering serfdom. The buyers, who would they be now, the ECB?

      The ECB is lending us the money to pay back our borrowings from the ECB…OR should we correct ‘our’ and substitute ‘Seanie & Gang’. Oh, wonderfooley magnanimous Irish taxpayers with such generosity towards the failings of so few.

      Confusing> Perhaps Clown can explain it to us.

      ..what we are talking about is dealing with the EU plans that we have to cut our deficits in line with what we have said..

      Nope, sorry, he can’t communicate. End of story! What exactly are those EU plans? Lol

  47. Gege Le Beau

    David McWilliams – you handled Conor Linehan’s jab about you ‘being in some many plays and interviews that you don’t know what you wrote or said’, nice touch to say ‘you are attacking a man for working hard’, I noticed it left him speechless.

    There is a way to handle these people, Lenihan yet again showed himself up (remember the kebab comment). Lightweight.

    • michaelcoughlan

      The fact that Mr McWilliams can be so vilified by an apologist like Lenihan is proof positive for me as to the fact that only the incompetent get promoted in this country. Those who are consistently accurate are ostracised.
      I have simply lost complete faith in Ireland considering that people like Lenihan are the type allowed to take control. The thing which I found most telling about Lenihan was when a member of the audience remarked the Lenihan was the biggest waffler of all he smiled (smirked more like it). A normally healthy person in my view would have been insulted and would have reacted angrily at the challenge to his/her integrity.

      • As an outsider and/or blow to this beautiful country, I share this observation.

        The low level of competence in the ruling establishment is rather embarrassing, and such are not my own comments but those of established Irish business people who run their business on an international stage from Ireland to Germany to India for example, hence have some international expertise and hands on experience to share.

        The democratic deficit in this country is a great concern and I believe is of utmost importance to tackle front on.

        • Tumbrel Cart

          Don’t worry about the outsider bit. Imagine the shame of being a native at present.
          The key to understanding Ireland is the near oxymoron in your sentence “The low level of competence in the ruling establishment is rather embarrassing”.
          We have an establishment that rules for itself. It cannot be considered a ruling establishment in any real sense. You are 100% correct in pointing out that the democratic deficit is a real issue. But as you can see from the contribution of Gege Le Beau (Sept 21st 4.40pm) concerning dynasties in Fine Gael, the problem is serious in both main parties.

      • Deco

        This is what happens when democracy is controlled by party machines / institutional power brokers.

        If Conor Lenihan was an independent, depending on word of mouth, rather than party activists chasing state jobs, would he get elected. Probably not.

        If Conor Lenihan did not have the party style fundraising which all comes down to IBEC or ICTU, would be get elected, as an independent ? Probably not.

        I reckon the best politician in this country is Marian Harkin, the Independent MEP in the West, because she is squashed between party machines with their thousands of dummy activists who on a trip of one form or another. In addition she has to deal with being ignored at best, and maligned against at worst, by all the aligned media interests which are all backing one party or another. These same media interests also know where the butter comes from for their bread, and are well able to diminish anybody who is a threat to “our advertising sponsors”. The only time she got help from the media was when she defending her seat against Libertas. She also has to deal with the fundraising power of various groups under the IBEC/ICTU lobbying spectrum. She really has to fight her corner, purely on reputation and work rate.

        Unlike Conor Lenihan, she is always serious about the point she is addressing. I never heard her smirking, laughing at nothing, or bullshitting like he does consistently. She also seems to think that is best avoid the Kildare Street Circus..

        • BrianC

          Yes very true about Marian Harkin. I lived up that neck of the woods and Harkin is a very genuine person and would give any politician a run for their money. And she gets very little support from the media save when as you say she was squaring off D. Ganly.

        • Gege Le Beau

          Some very good points on Harkin, never occurred to me, will take them onboard.

          Lenihan is part of the dynastic politics that arguably played a negative role in the democratic process(totally narrows the spectrum). I was also particularly struck by the crowd leading the push on Kenny:

          “The nine Fine Gael rebels include five TDs with deep Fine Gael rootsincluding Mr Naughten himself (son of former TD Liam Naughten), communications spokesman Simon Coveney (son of former Fine Gael minister Hugh Coveney), social protection spokeswoman Olwyn Enright (daughter of former TD Tom Enright), foreign affairs spokesman Billy Timmins (son of former TD Godfrey Timmins) and agriculture spokesman Michael Creed (son of former TD Donal Creed).”

          1. a system of government in which a sequence of rulers is derived from the same family, group, or stock.
          2. the reign of such a sequence. – dynast, dynasty, n.

          • Black Cat

            What’s so bad about more EU/German/French influence in our society maybe its dose of medicine we need to bring us into the modern world.
            Some characteristics of Ireland i wouldn’t miss:
            1.Joe Duffy and his pack of old biddy followers dictating social policy
            2. The catholic church/paedophile priests and the catholic church’s control over much of our education system
            3. Gombeen politics/money grabbing politicans
            4. Tribalism – people who are willing to support corrupt/incompetent politicans because they are from their local area.
            5. Political dynasties – the Healey Raes point in case

          • Deco

            Gege le Beau,

            Here is my take on the FG internal ‘split’.

            If you look a the Baby Brute side of the divide, you will see that ‘class’ is a matter of much greater importance than on the Kenny side of the divide. Coveney and Brian Hayes being a case in point. All the aristocrat type politicos are behind Baby Brute. The Blue bloods of the blues as such. Despite the carry on of Kenny, I am relieved he did not lose.

            Nobody in the media mentioned this. Absolutely nobody. Apart from that old loose cannon on deck that we are not supposed to know about, “Pheonix Magazine”.

            In particular, the stance of the IT, which was ridiculing Kenny as a country bumbkin, and Baby Brute as this enlightened genius. It must be said that the Indo did tell us that the boy wonder brute bought shares in such great examples of Irish management as Anglo and CRH. (Now, any eijet will tell you that was not such a bright idea).

          • Deco

            People don’t support the Pee Flynns and the Liz McManuses of this world because of tribalism as such, but because like Tom Parlon – they advertise what they deliver. And they deliver “Something for nothing”. In fact we could view the democratic process as a big economic exchange, where interests get behind ‘personalities’ and the personalities let their supporters get their snout in the trough in return.

            Basically these glorified councillors exist purely to get money from others and then boast about the “work they are doing for the community”. By the way, government departments, quangoes and lobbyists to the same thing.

            Really it is a farce. And we should be honest about it. The whole thing is driven by greed disguised as altruism, justice, rebalancing, and good causes.

          • coldblow

            Deco, bullseye!

            Black Cat

            Please don’t take offence but I think your list is a little naive.

            1 Joe Duffy – the show can be irritating but it’s more democratic than the rest of the media. You have to ask the question: who actually dictates social policy? For sure it ain’t Duffy’s crowd. He really should take elocution lessons… Just joking – he said himself that his mum wanted him to do that (and I know a teacher from Ballyfermot who sounds like she had the IT as swaddling clothes and was privately tutored by lady of gentle birth and poor means) and if he’d taken her advice, just think, he’d be on AA Roadwatch now!

            2 Catholic Church – if they weren’t involved in education you’d have other political and ideological interference from the likes of the VEC etc. In a way, Catholic education is probably as ideologically neutral as you can find here. Here’s a nice concept, what would this mean: non-non-denominational. “Normal, with “a little bit of religion” thrown in. What I mean is, there is a limitless supply of busibodies available to fill any ideological vacuum! Actually, I like that: Me, I’m non-non-denominational! (Might have to refine these ideas – just writing them as they pop into my head!)

            3 Gombeen politicians. Alright, can’t argue there.

            4 Tribalism. Well, I can’t really argue there either having mentioned it myself recently. Although I’d understand it as originating as a defence mechanism against metropolitan interference. Think John Waters’s “Dancing at the Crossroads”, where he accompanied his father in the postvan around Castlerea and they’d give lifts to the locals and discuss politics and life. Meanwhile Uncle Gay would be ‘opinion forming’ from a carefully prepared script (written for him by others) at RTE. The people there hated it – although most have probably been worn down by now and accept it all as received truth. Or think Desmond Fennell’s “Nice People and Rednecks”, the title says it all. (It’s all coming out now..!)

            5. Healy Rae dynasty. No, I think you’re a bit wide of the mark here too. I don’t think anyone is fooled by the act, the Healy Raes draw great expenses according to the published figures. But compared to many they aren’t the worst. My former French teacher, a young lady who was engaged to a doctor, high-handed, arrogant and a self-declared ‘Cartesian’(whatever TF that means) recognized our description of Jackie HR as the same homme misérable she recognized from the watering hole she frequented, he was the man who used to emit disagreeable sounds and odours from his rear end after a few pints. She was obviously unaware that he represents the ordinary working man, in his own words “the kind of man who ates his dinner in the middle of the day”!

            I don’t think the English would vote in people like him. As an old politics lecturer used to say, they would vote for lampposts if told to (the other students hated him, I found him instructive). Maybe the problem with the Irish is that they are too knowledgable about politics, and the politicians in particular. Just throwing that idea out there…

            IN summary, I think we need to identify the real enemy first. Let’s start by following the money…

      • BrianC

        Hello Michael

        Well I printed and despatched your open letter also emailing. No changes made save the typo on the name. You never know there is always hope. I am a diligent tryer (is that a correct spelling?).

        As for Conor Lenihan on front line he let himself down by attacking David McWilliams like that portraying himself as pathetic a fool trying to defend the indefensible. Gege Le Beau nailed it can’t say any better than that.

    • liam

      My fav #rtefl comment from yesterday was: “Conor Lenihan looks like a dog being shown a card trick”.

      I believe our host is learning a few new tricks for dealing with these assholes, very well done indeed.

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