October 11, 2010

Avoid false ratings prophets

Posted in Sunday Business Post · 205 comments ·

The other night, I watched American Gangster, the marvellous film made about the life of Frank Lucas.

Lucas built a huge heroin dealing network, buying the heroin in Vietnam in bulk and then releasing it on to the streets of New York.

Apparently what distinguished his heroin from the competitors’ heroin was the pureness of the drug.

Unlike his competitors, Lucas had such a good source that he could afford not to cut the drug up so much and therefore the quality of the heroin marked his product out. In an effort to brand his heroin to distinguish it from his competitors, Lucas marked all his heroin bags with the name ‘‘Blue Magic’’.

The Blue Magic mark attested to the premium quality of the drug.

However, to get the premium stamp, Lucas had to employ chemists who would check the quality. It wasn’t good enough to employ addicts to verify, he had to get it properly assessed.

In the real drug world, the drug stamper is a crucial part of the drugs business.

For example, when cocaine comes into Spain from Latin America, Irish dealers, who are buying the drugs from bigger Latin American dealers, will get a ‘‘chemist’’ to verify that the drug is of a certain purity.

Once this quality has been established, the Irish drug dealers will set about moving the drugs from a warehouse in Spain to Ireland.

With the image of drug dealers in your heads, let’s talk about the banking businesses and the various characters who play their role in the money chain.

After all, the credit business, like the drug business, is all about distribution.

The money – like the drugs from Latin America – comes in at the top when the local bank, say AIB, borrows in the money market. In a credit boom once it has the money secured at the top, a bank like AIB goes about pushing the credit through the system so that it can get to the credit junkies at the bottom who will use the credit to feed their consumption habit.

But, like the global drug dealer, the international banking system needs its stamper who attests to the quality of the money or the financial product that is being peddled.

This is where the so-called ‘‘objective’’ ratings agencies come in.

And this is why I get annoyed when I hear some suit from Fitch, Moody’s or Standard & Poor’s prattle on about our credit rating.

Do these people have any credibility?

Like the whole economics and finance industry, the acid test of credibility should be how they answer the simple question: ‘‘Where were you in the boom?”

In Britain in the 1950s the question about personal character was always ‘‘Daddy, where were you in the war?” Now it should be where were you in the boom, and if you were on the wrong side I can’t take you seriously.

So where were the credit rating agencies in the boom? Were they on the right or the wrong side?

Let’s stick with the drugs metaphor to explain where the rating agencies were and what they were doing.

Both investment bankers and drugs brokers need to know the quality of the product they are paying for.

The drugs broker has a chemist. The chemist rates the purity of the consignment, gives it a triple A stamp and takes his fee.

The investment banker’s equivalent of the drugs broker’s chemist is the rating agencies.

By rating companies, banks and countries, the rating agencies should give investors peace of mind – promising them that what they buy is of good quality, unlikely to default and so won’t cause them any sleepless nights.

If the rating system fails or is compromised in any way, the foundation of every transaction collapses.

Consider the drugs world.

What would happen if the chemists were actually paid by the supplier to rate bad stuff as good stuff?

What might the drugs syndicate in Dublin do to a stamper who lied about the quality of the gear because he was in the pay of the supplier?

In the boom, this was not a concern in the banking world. Perhaps nobody ever watched a mafia movie like American Gangster. In the US sub-prime mortgage disaster, the rating agencies were paid by the banks to rate the junk they were selling as triple A.

In reality, some of the assets in this AAA toxic cocktail were worthless. Subprime debt, loans to people who had neither means nor intention of repaying money, were packaged with reliable securities, then given gilt-edged ratings by agencies in the pay of the banks. In the Irish case, our banks – just when they were blowing their balance sheets – were rated AAA by the same rating agencies who are now telling us they can rate us.

Credit was used to buy over-priced houses when there was little connection between the price of the house and its value.

But for this transaction to take place, we too needed a local stamper or verifier.

We needed someone to validate the price paid: ‘‘This is correct.

This two bedroomed terraced house in Monkstown is indeed worth €1million.

Your money is safe here.” This is where the estate agents came in.

They were responsible for valuing houses.

Bizarrely, these valuations were given credence even though, like the rating agencies, an estate agent’s fee was directly related to the sale price.

So house price inflation was in the interests of the estate agents: higher prices meant higher fees.

The banks and the estate agents were hand in glove, working to hoodwink the punters.

Now the same estate agents are telling us that the property market has hit the bottom.

Meanwhile, they have Nama to pay them to value stuff they overvalued in the boom.

And what about the international ‘‘stampers’’, the rating agencies? These lads are the estate agents of the financial world.

They are now on Irish radio telling us how to run our country and what we should and should not do.

They are simply chasing the market. They are always last to know.

Now they are downgrading Irish risk when they should have been downgrading it before the end of the boom, not now when the dogs in the street know what is happening.

Most egregiously, they are given credence.

Next time a Fitch spokesperson downgrades Ireland, let’s just ask him where he was in the boom and then show him the door.

There is one thing I can guarantee: when our fortunes turn, those lads will be the last to cop on.

  1. adamabyss


    • Ravished By The Sheer Implausibility Of That Last Statement

      Levy: You are amoral, are you not? You are feeding off the violence and the despair of the drug trade. You’re stealing from those who themselves are stealing the lifeblood from our city. You are a parasite who leeches off–
      Omar: Just like you, man.
      Levy: –the culture of drugs… Excuse me, what?
      Omar: I got the shotgun. You got the briefcase. It’s all in the game, though, right?

      • Ravished By The Sheer Implausibility Of That Last Statement

        I actually believe capatilism is best seen through the lense of this metaphor; it’s just that we’re all junkies even if we don’t know it. We are all culpable and deserve what we get. As Keynes is said to have said “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”
        The fault lies not with the banks, rating agencies, estate agents or any other easy scapegoats, but our willing acquiescence with a system that produces these entities as a necessary evil.
        Might be wrong though.

  2. David, where would company auditors fit in with your narcotics analogy? Would you consider doing an article with a financial accountant to examine the standards used by Irish (and indeed many international) auditors to assure bank shareholders that the accounts gave a “true and fair view” of the condition and performance of a bank? Would you in particular examine why banks here have uniformly declined to adopt the discretionary element of International Financial Reporting Standard 9 (IFRS 9) which will make more realistic valuations of loans mandatory from 2013, but is discretionary until then. Bank of Ireland should be a nationalised bank if it were to recognise the true scale of losses on its €5-20m formerly NAMA-bound loans and its non-NAMA loanbook. More importantly the government does not have accurate financial information on which to base policy — if this time last year we knew that all five NAMA banks would be State-owned by now (and whilst BoI is only 36.5% State-owned, it only escapes State control by playing pretendy games with its loss provisions) then there wouldn’t have been a point in a separate agency called NAMA — new departments in the banks could have valued the land and development loans and held them in a separate subsidiary of the banks.

    As you say there is a testing hierarchy in the narcotics trade with the lowest rung occupied by the crack addict doing his own blind Pepsi/Coke test. You might see them hanging around O’Connell Bridge looking to make a few euro so they can get their next score. Are company auditors any better?


    • You have an interesting point . As an ex registered auditor the ethics of all professional bodies do not embody the interest of ‘State Public Policy’ .Auditors Reports are always qualified ‘either in large print or small print’ .This means their document is for the Casino to make what they want to do of it .If you have a problem its yours not theirs .’So pay up and shut up’.What else they see or saw as long as it is not under the terms of letter of appointment is non of their business ……holy smoke .

      • True & Fair View : Do not be misled by their excuses under this because they abuse it when they make mistakes and the public have found out eg Directors Loans, are a significant and material amount and under companies acts need to have be seen to have been ‘properly ascertained ‘ during the course of their audit.

        Blood Hounds : is a common excuse to fudge you the public so you remain confused .There is always an element of ‘Materiality’ to certain values eg Directors Loans and they require a proper assessment that must be significant and its materiality ascertained .Many directors loans were like Whales in a fish pond .

    • coldblow

      Wasn’t Seanie a leading light in one of the main accountancy bodies, which set the standards for auditors among others, which surely operate for the benefit of their members not that of the public?

      Aren’t auditors appointed on behalf of the shareholders? Result: bank shareholders ruined. Rating agencies vouching for debt quality? Result: subprime crisis. Valuers? Result: more of the same. I mentioned pension funds the other day (in one case £120k paid in over 40 years out of which £99,900 would be taken in fees). Result: penury in old age.

      “Congratulations! You have just been financialized!”

  3. seamus1972

    It’s hard to know where Ireland is going and will end up at this stage. I think people don’t know who to believe anymore. I know that when the budget gets handed down people will go crazy. To use your imagery to describe it, I have a vision in my mind of a scene from Rocky 3. It’s the one that Mr. T known as Clubber Lang appears. It’s the scene where he is making his way to the ring with the entourage and press around smothering him. He is asked by one reporter, “Klubber, what’s your prediction for the fight?” T which he replies, “My prediction for the fight?” and as he looks into the camera, he says “PAIN!” Now change the characters around a little. Lets have Minister Brian Lenihan dressed in a boxing gown, heading towards Dail Eireann. When asked by a reporter, “Minister Lenihan, what’s you prediction for the budget?” “My prediction for the budget?” “PAIN.” If it wasn’t so true and “painful” it would be quite a funny sketch that somebody could re-enact on TV. I really think there is going to be world war three when the do hand down the budget and they tell the Irish people that it’s going to be cuts of 4 Billion Euro or even more! I don’t think people are going to take it anymore. David, in your next article, can you please describe in detail a course of action Ireland can take to get out of this mess. Please describe this from start to finish. Maybe then you can use it as a petition and it can be signed by every voter in Ireland and handed into the government as a course of action they wish to take. I am only glad I am now living in Australia!

    • Black Cat

      My main concern is that we have solidarity – I work in a very small community and I have seen people getting the hump with each other because the other person got a few months longer on her CE/FAS scheme – or jealousy because someone else landed a good job, constant references to who has x amount of money and so on – I know people are desperate but of all times it’s now we need communities to stick together

    • jandal

      “I know that when the budget gets handed down people will go crazy. ”

      Really? I fear nothing at all is going to happen, the only tendancy we’re showing is one to absorb everything that’s thrown at us – that’s partly why we’ve ended up here.

    • “Maybe then you can use it as a petition and it can be signed by every voter in Ireland and handed into the government as a course of action they wish to take”

      PetitionOnline provides free online hosting of
      public petitions for responsible public advocacy

      more than 88 million signatures collected
      tens of thousands of active petitions


  4. Deco

    Ireland, the intellectual condition, the manufacturing of consent, the euphoria, the debt, the lifestyle, the stupidity and the sophistication. The denial, the anger, the empty oversized infrastructure, the chase for out-sized significance in Freudian terms. The advertising, and the lemming runs resulting. And the pride. Press the pride button and watch us turn from rational beings into total gobshites.

    The official leadership, a collection of politicians by family trade. Many of whom should be classified as having addiction problems. Clarity ? You can’t have clarity if your mind is a mess, if you inherited your seat and if you are surrounded by arselickers. The real leadership, a bunch of well connected spoofers with the right sports club memberships, groomed from childhood to command rather than obey, running the backroom of IBEC. And the presumed real opposition, a collection of union fat cats chasing NED’ships on state quangoes, who can always say the right terminology to make us feel as if we are being protected.

    And the outcome ? A quagmire. We deserve it for being so blind as to not know what was going on, and for believing a media that was telling us all sorts of nonsense, so that we would be to busy to ask. We were instructed to become stupid, and an awful lot did. In the name of the supreme emotion, Pride.

    Ireland is a very crooked country. The description concerning credit being akin to the cocaine trade is apt. As somebody pointed out recently, a lot of people in the banking and legal professions were on cocaine anyway. As we can see, there were evidently out of their minds when they were making this disaster.

    We have constructed Irish society, since the rise of Haughey, so that money lubricates all sorts of wrongful immoral behaviour. We have done this by means of the law. We have laws that enable and facilitate this, laws that are contrary to Article 45 of the constitution, and contrary to the spirit of the common law to protect the common man. And this is evidenced with these speculators and their behaviour. It is evidence by the corruption of the institutional framework of Irish society.

    But before it can change, we must see it clearly. We must stop being led, and start individually to doing our own thinking and our own leading. And that is the one thing that the corrupt elements do not want you ever doing. Because after that you will never throw the fruits of your hard labour into their pockets.

    • Deco

      question for all those who left Ireland……

      How many of you would say that the level of corruption, cronyism, and crookedness in Ireland is an influencing factor in deciding to get out ?

      • Gege Le Beau

        Government policy is driving people out.

        If they cut salaries again then I may have to join the exodus because it is a struggle as it is, life is just too short for that, there are options abroad however challenging.

        Ireland will suffer a ‘brain drain’ in the long run and could lose the flower of its youth, meanwhile the insiders as David McWilliams has so frequently written about, stay in the lifeboat, knives drawn for any oncoming swimmers from HMS Failed Republic.

        • Dilly

          Thats what it comes down to. Life is too short. I am out of work. Even though I have a job interview tomorrow, and I am still thinking, should I just get the hell out of here while i can.

          • Ravished By The Sheer Implausibility Of That Last Statement

            Good luck with te interwiew

          • Good luck with the interview. If you get it, Stay! Try the new job! Don’t be afraid to fail though. Its normal to fail in certain circumstances!

            If you don’t get the job, don’t be an eejit, go seek a better life with adventure, fun elsewhere.

            My 2 cents come with caveat emptor:)

      • Ravished By The Sheer Implausibility Of That Last Statement

        possibly corruption is a good sign, it’s a weakness, I’m afraid of an elite that isn’t corruptable…

      • ocallaghanr

        I was speaking with my father yesterday and the conversation came round to the time, back in the 80′s, when he considered uprooting the family and moving to Canada. In the end he and my mother decided not to as they already had a young family, a house and a budding business – they had too much vested in this country at that time to risk the uncertainty of emigration. I vaguely recall the conversations at the time myself. What I did not know at the time and what I found out yesterday was his actual conviction for considering emigrating in the first place. Guess what that was???

        I now find myself with exactly the same conviction that my father had back then. Thankfully, I have none of the responsibilities to tie me to the place. I shall be taking flight next year.

        • Black Cat

          I was in Dublin at the weekend and was struck by the vibrancy of the city on a friday night – it’s like the young people made the place their own – most of them probaby can’t get a leg up in the place, look on Daft and it’s obvious that most of them are paying half their wages to rent dingy little places or to squash in with loads of others in overpriced rented houses. On channel four news tonight John Snow called the 30 somethings the jilted generation because they are locked out of the housing market by older buy to let speculators – the same pattern is repeated in Ireland and what happens when the pressure mounts and it becomes two or three generations who are disenfranchised in this way – they will have less of a stake in sociey and less reason to care about it as a consequence. Something has to be done for the younger generations who have been the loosers in the so called boom and are now being told they have to pick up the tab as well.

          • uchrisn

            There are a few issues at play here. The first is the basic human neccesities should not be used by speculators to make money.
            For example if your leg is badly broken you would pay anything to the doctor to get it fixed. You would pay anything for that. Should the doctor tell you that you need to pay him 300,000 euros over the rest of your life or he won’t do it? You need your leg to get fixed so you have no choice.
            Shelter is a basic human neccesity and should not be used by specultors to make exoborant profits. In New York they have rent controlled apartments. In Germany and Holland they have caps on rent. Lets see either of those 2 systems introduced into Ireland.
            Also legislation should be brought in to prevent people from owning more than 2 properties as in Shanghai and Italy. Legislation against hoarding of development land could be introduced. There are any number of ways thae issue of speculators can be controlled. However no changes have been made in Irelands housing legislation to prevent a repeat of the bubble.
            To zoom out for a second, the developed world has an increasing percentage of people in the 60-90 age group. These people need a good bit of money to live a comfortable retired life. So we move onto pension funds and property.
            One thing that has become clear through the crisis is the reliance of pension funds on the residential and commercial property market. Pension funds were basically speculating on property to get pension fund money. In Ireland there was legisltion brought in to say that commercial rents cannot be decreased. Many businesses went out of business becuase of this. The argument for not changing the legislation, pension funds would lose massively if commercial rents fell. So young people should give up most of their profits to pay the high commercial rents and thus the pensions.
            So you get the idea. The younger generation has to work harder to pay for a comfotable life for the increasing 60-90 age gap. The question is how hard should the younger generation work and how comfortable should the 60-90 generations life be? Well that generation is trying to bully the younger generation into working very hard by charging exoborant rents and prices for shelter – a basic nessecity. Its a good system really the younger generation need shelter, so they have to pay.
            However there is one flaw. What if the younger generation decide its not worth their while struggling so hard. Whats the point of running a business if most of your profits go on commercial rent? Whats the point of working overtime for 30 years just to pay for basic shelter?
            So lets stop pension funds from bullying the younger generation by changing the legislation for property rents and commercial rents and property speculation.
            Instead lets pay for the pensions with more taxes.
            Thats is a fairer, above board and more clear arrangement.
            Of course remember that rich people, estate agents, developers and other people are also using this unfair property speculation system to make big profits for themselves like paracites. So we would cut that out also by bringing in good legislation while looking after pensioners with our taxes.

      • foi foi moi moi

        Chalk it down Deco…its who you know in Ireland not what you know, always has been always will be

      • Fergal73

        I emigrated because I saw the bubble in 2002/2003 and got out in 2004. I was unable to reconcile the price of housing with the average income and saw that by taking on a mortgage on an overvalued house could potentially put me in an horrific financial situation. (I was offered 12.5 times my salary for a mortgage based on future income growth, bonus and existing savings).

        The estate agents’ interests in artifically boosting the values was clear. The government’s interest in the same for stamp duty was clear.

        Did I explictly think of it as corruption? No. I thought of it as blind stupidity and held no hope for a correction with an electorate who voted based on civil war politics and parish pump concerns rather than a national strategy or self interest.

        I would recommend to anyone who can; Emigrate.

        @ocallaghanr, if you don’t emigrate, you will leave your offspring with the same choice as your parents left you when they stayed.

    • Gege Le Beau

      There were also ‘prophets’ with their warnings and many who did not buy in to the propaganda, many of whom post on this website.

      A colleague now living in Australia and enjoying ‘good weather, a rising economy and a fantastic rugby team, just like home circa 2006′, emailed this morning to congratulate me on my dire warnings back then.

      I replied ‘I was not alone’.

      Maybe we need to see a collapse, IMF entry etc otherwise we will be back in this position years from now, we need radical change and that can only come from a truly dire situation, we need a genuine alternative to the ping-pong that is Irish politics (FF to FG and back again). One business party masquerading as two political parties.

      What truly disgusts me is the opportunism of people joining the Labour bandwagon in anticipation of a place in government and worse still, Labour taking these former PDs and FG candidates, they are diluting what little social conscience they have.

      • Deco

        Great, those ex-PDs can join the opportunists that already exist in the ILP. They will get on great together….(a lot of ex-PDs are in the HSE anyway, and they are becomming more socialist than Bertie Ahern….)

        I could never understand why so many people from priveleged backgrounds, ended up following a career in socialism. But, I suppose if the people are going to vote for a party in large numbers, and that party gets funding from SIPTU, then it is probably a pretty safe place to start a political career.

      • PMC

        If the IMF come in and turn the place around, it might be a fantastic opportunity to kick the current political setup out the door and go about putting an honest PURELY meritocratic system in place.
        Why? Because none of the buffoons from ANY of the parties could lay false claims about how they were the geniuses that saved us all.

  5. Gege Le Beau

    Interesting when the drug and banking meets….

    Drug money saved banks in global crisis, claims UN advisor.

    Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions


    As for the layers of ‘property professionals’, well we know what they were up to, criminal and immoral.

    Budget Day, December 7th, is also the anniversary of Pearl Harbour, both days will live in infamy.

    • Deco

      ‘propert professionals’ – not to be trusted. Gombeens.

    • Ravished By The Sheer Implausibility Of That Last Statement

      Both had it coming, you reap what you sow

    • paulmcd

      SOME OF THE DRUG MONEY WOULD BE IN ANGLO BONDS – so-called BEARER bonds, without names of addresses of holders, a prime instrument for money laundering.

      Mr Lenihan, I hope that you have ensured that comprehensive lists of addresses of people submitting coupons for payment is being drawn up for later release.


      Please see to it also that you investigate the books of Lawyers who are acting on behalf of bondholders so as to supplement the lists. Lack of cooperation on their part should be met with equal indifference when they request payments.


      Any future government should ensure that failure to have kept full details of addresses of bondholders and sums they will have received should be treated as a treasonable offense.


      • wills

        Is it not the brokerage firm which holds a client list of names.

        Name of the brokerage firm / middle men representing Bondholders to Anglo?

        • paulmcd


          I have been trying without success to post a link on Registered versus Bearer bondholders.

          Perhaps those of you who are interested might google the subject.

          Bearer bonds of the kind used by Anglo have been illegal in the United States since 1982 for money-laundering, tax-evasion, and other reasons

          Colm, I have not had the time to fully analyse the PDF document but it seems to look primarily as the US dollar situation.

      • Paulmcd

        You máy be interested in the following on restructuring and the difficulties of dealing with bondholders vis a vis their identities and so forth.

        OT there is the other matter of sovereign debt and government borrowing for the deficit on the markets…much bigger issue. Presume Anglo default is the intent behind your request for bondholder information.


        “..The liquidity of the capital markets also allows
        investors to trade their positions on a daily basis.

        Such liquidity, coupled with the desire of some
        investors to keep their positions confidential, has
        the unfortunate result that issuers seldom know
        their bondholders.

        A long-distance bondholder relationship is very
        comfortable as long as the company is able to meet
        its interest and principal repayment obligations.

        Once a company sails into troubled water, it is
        difficult and sometimes seemingly impossible to
        negotiate with a nameless, faceless, ever-changing
        group of creditors spread around the world.

        …..However, finding holders of bonds that are trading is like piecing together a jigsaw puzzle while someone hides the pieces.

        Many issuers erroneously assume that the trustee
        can provide them with a list of bondholders. The
        terms of the indenture under which the bonds are
        issued generally state that the trustee as registrar will maintain a list of bondholders. But issuers quickly find this list is not very enlightening due to the way in which the clearing systems operate and hold bonds.

        ….As long as the bonds are in book entry form, they are held in the name of the nominee or a common depositary for the relevant clearing system. If the bonds are held in DTC, the nominee is Cede & Co. If the bonds are held in Euroclear or Clearstream, they are registered in the name of one of the approved banks that act as a depositary for both systems, such as Deutsche Bank or Citibank.

        Locating and identifying bondholders is the first
        and biggest challenge in any restructuring. This is
        a function of the structure of the clearing systems,which were designed to improve liquidity by using special security codes consisting of digits and letters for each bond rather than using the names of the companies issuing the bonds.

        ———-As a result, the ultimate investor has several layers of ownership between itself and the issuer and is able to hide behind the name of the broker. When a troubled company tries to send a notice to bondholders regarding a restructuring, the message often gets delayed or even lost in the layers of custodians. Sadly, the ultimate investors and decision makers often do not learn of a vote until the deadline has passed.

        …….Another sub-custodial relationship arises when a US domestic branch of a broker holds the bond on behalf of a foreign affiliate. For example, you could find Nomura in New York is holding securities at DTC for Nomura Singapore, which in turn holds for a small broker in Hong Kong, which holds for a private investor in China. The more responsible brokers will sometimes respond at both levels on behalf of their ultimate client with respect to a bondholder identification request. Fortunately, this is not difficult to spot as the size of the positions should be identical.

        …As mentioned, bonds are highly tradable instruments. Traders have to trade. Positions change overnight and information about a bondholder group can be out of date as soon as it has been collected in distressed situations. In a default, trading activity increases whenever new information is released into the market. Often a bondholder identification exercise needs to be repeated or at least updated several times before an issuer seeks formal approval of any restructuring plan. ”

        Note mention of Deutsche Bank above. Think of the links between the Deutsche and ECB. ECB may be protecting Deutsche bank bondholders against Anglo restructuring? Wheels within wheels!

        Working with bondholders is as illusive as NAMA trying to find a pot of gold among all those ghostland estates marked with crosses on a map of Ireland Inc following our Klondyke gold rush.


        • Ravished By The Sheer Implausibility Of That Last Statement

          Thank you for that little bit of enlightenment, I’m only a layman when it comes to the financial world. However it’s not cheered me up much.

        • jgarrihy

          Pardon my ignorance, I was reading your piece with interest and was wondering how a bondholder gets his payments if he is so hard to trace. Is there not surely a money trail or are there privacy laws which hinder a location attempt?

      • uchrisn

        +1. The Swiss banks have been for years and are currently living off the interest of moneys from convicted criminals. Thats one of the main reasons why they didn’t join the EU, their banking secrecy laws would be changed. That helps the Swiss in general to have a high standard of living as the banks put this money into society.

    • ocallaghanr

      Is it time to discuss the logic of prohibition? Considering the potential tax revenue it could yield I think its a viable option given the current state of our finances. Think also about the savings in policing, court and jailing costs. You may say I’m a dreamer…

  6. Deco

    Apparently, some people think that gambling is something that we don’t do enough of in this country. http://www.sbpost.ie/breakingnews/business/eyqlqlcwaucw/

    I am begining to think the whole economy is being turned into a casino, with billions heaped on the Irish management concept to lead us out of the mess that it led us into.

    • Deco

      Las Vegas on the Liffey. We even have our own maFFia….And now, as a price for staying in government, Michael Lowry, Independent TD, and specialist in extensions, and other matters wants Las Vegas in Tipperary also.

      Is this part of the knowledge economy, or are we back again to speculation and something for nothing as a means of economic development ?

  7. Deco

    If the Irish consumer is a credit addict, then are we to presume that the current government borrowing requirement of €20 Billion per year, plus all the money pumped into useless banks like Anglo and INBS, is the financial equivalent of drug replacement therapy ?

    Or maybe the government is afraid to tell the addict the nature of the addiction problem ?

  8. Ravished By The Sheer Implausibility Of That Last Statement

    I actually believe capatilism is best seen through the lense of this metaphor; it’s just that we’re all junkies even if we don’t know. We are all culpable and deserve what we get. As Keynes is said to have said “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”
    The fault lies not with the banks, rating agencies, estate agents or any other easy scapegoats, but our willing acquiescence with a system that produces these entities as a necessary evil.
    Might be wrong though.

    • Gege Le Beau

      Potential ‘Irishism’.

      A bold statement of fact or intent followed by a question mark/possible uncertainty.

      • Ravished By The Sheer Implausibility Of That Last Statement

        Are you are aware of any absolute certainties???
        Heisenberg Uncertainty Principle ring a bell?

  9. wills


    Another *reality defining* article.

    A Mind-blowing reality.

    The *free enterprise* system is overrun by Arthur Daleys.

    They are everywhere. Behind every bank desk, real estate agency desk, they are in the legal profession, governing, etc etc.

    Middle men moving paper.

    Men in tall hats.

    Cultural meltdown.

  10. Confidence, perception, if people arn’t confident to spend, are told ‘bad times ahead’, they’ll hoard and save like crazy, thus choking the lifeblood of an economy. That’s why speed is of the essence. From 2008 until 30 Sept 2010 we’ve had drip, drip spiced with ‘government confidence building’ by Lenny. Our fiscal situation far worse than we were being told. So the naysayers have been proved right. NAMA like a Hungarian dam holding back toxic commercial/residential property is creaking at the seams. Now we have a ‘consensus building’ four year budget on the cards, its not going to work! We shuda burned the bondholders, spent money saved on a recovery bank, with 33:1 leverage and other supports we could have cleaned our banking system. But Ollie Wren and EU colleagues don’t wish us to default with potential domino problem for the eurozone, so its ‘Slaughter the PIIGS’ time on the pyre of austerity for Ireland Inc. We’ll see if the other default dam holds, its holding back Greece as well. It should collapse by next Paddy’s Day and the FF formula for fiscal collapse should bear fruit.

    Then we’ll rebuild hopefully in a world where Ireland Inc delusions built on false foundations have been burnt too!

  11. Zaphod

    I got an idea, let’s generate income and legalise the illegal drugs.
    Coffee shops Dutch style, loads of tourists and loads of extra resources for the criminal justice system as it doesn’t need to spend millions prosecuting/imprisoning users.
    Make everyone responsible for their actions in charging smokers/drinkers/drug users a higher medical insurance premium.
    Enforce dui to the max.

    • Deco

      If that ever gets the go-ahead here, I expect that the Lawyers will make sure that insurance companies will not be allowed to discriminate against the reckless….after all they should not be singled out for special treatment because they damage their health…

      A bit like the banks….in Ireland the idea of commonwealth means that the honest pay for the crooked, the workers pay for the slackers, the thrifty will pay for the gombeens, etc…

  12. jor200

    It is interesting that capitalism and “the markets” are the scapegoat for all our woes. Irresponsible government over the last 60 years has been at least as culpable for where we now find ourselves. Alan Greenspan artificially kept dollar interest rates too low in response to that politically motivated creation of the EU-SSR, the euro. Bill Clinton repealed the Glass-Steagel Act and his Assistant Housing Secretary, Roberta Achtenberg forced the US bank to provide sub-prime loans to those with no incomes. All of the commentary is about greedy bankers but why did the Government not just guarantee bank deposits and thus force the banks and developers to auction off overvalued assets. The bank bail-out may well exceed the 50bn. that we have been told about but it is a one-off and is still less than annual spending of 60bn. by the Irish government which nobody seems to be particularly bothered about.

    • Q ‘Government not just guarantee bank deposits’

      Possible A’s, add your own:

      1. Each bank considered TBTF because of fragile state of economy and banks, fear of domino effect in Ireland and contagion in Europe.

      2. Merrill Lynch and Goldman understating the problems with the banks

      3. Anglo a FF bank trough too painful to lose

      4. The offer of NAMA €54 bn support from EU to act as a backstop to buffer and control write down of losses

      5. Possible CDS (Credit Default Swap) exposure attached to Anglo within the wider financial system globally (research required)

      6. Unpalatable immediate write-down of losses against the lure of a later write-down in a ‘return to boom’ scenario.

      7. Lots of jobs for the boys in the legal/financial services industry to administer NAMA and the toxic lock down!

      8. Incompetent, corrupt decision making.

      Mostly, it was the misbelief that NAMA and other tweaks could put the genie back in the bottle where property markets could be controlled. For this to happen, bond markets need persuasion. Deflation cannot happen, bubble needs to return. Growth led export boom floating all boats saves all from the rocks.

      Unfortunately, re 8) we are facing into a long drawn out recession. We built a solution unfit for the choppy waters ahead. Our property sector is still contaminated by the remains of earlier contagion. Political and banking contagion with 80% of previous bank boards still in place.

      We should have gone for bust and burnt bondholders and dropped the TBTF for Anglo by burning it publicly.

      We’ve spent the last two years throwing good money after bad.

      The banks and property sector still require burning before new growth can begin.

      Because we have not been able to do so, the markets will burn them for us.

      • uchrisn

        Nice list. I also watched the movie American gangster. Based on a true story. Some 100 of New York police officers working on the drug squad were convicted of corruption in 1975. They thought that what they were doing was ok becuase there was that was the culture in the organization. Didn’t the NYPD then have strong Irish connections?
        Whats the chances of getting 100 people convicted in Ireland? Do we need a vigilante to go on an undercover mission? David McWilliams might get recognised so he can’t.
        To people who think that whats written above is just a mad conspiracy theory, they should look at examples like the NYPD. Cultures of corruption where most people think their behaviour is actually acceptable do exist.
        The result of people not investigating or being strong enough to point it out would leave you with an organisation something like the Mexican police force.

    • juniorjb

      That’s a pretty strange comment, that “all of the commentary has been about greedy bankers”. I think even a cursory glance at the commentary in Ireland shows that irresponsible government is consistently identified as a major cause of the crisis. It is clear that your comment is inspired by a strand of right-wing US opinion that attempts to lay all the blame at the foot of government interference and you rehearse all the usual arguments, none of which convince unless you proceed with the notion that government and private business are somehow at loggerheads at all times. What do you think Clinton’s relationship to Wall Street was? In any case, I think in Ireland we have to some degree avoided the line of argument that supposes you can separate the state and the market in a neat fashion and argue from first principles.

  13. Blue Magic : When a flame burns it is normally ‘yellow’ until it is fed with an oxy substance to enhance the heat inside and then it becomes ‘blue’. Thus Blue is the colour of passion and purity.

  14. paddyjones

    All of our woes come from the property boom both commercial and residential and prices are still falling ( 11% this year so far ) that means more losses for the banks as borrowings turn sour. Developers have used limited liability vechicles to absolve themselves from any personal loss however many private mortgage holders have been left with the total loss.
    borrowing to invest is madness, would you borrow money to gamble on the stock exchange?…no you would not yet people borrowed money to gamble on property.
    Prices are still grossly overvalued , in 5 years time a 3 bed semi will be less than 100k in my opinion. With 300,000 houses on the market asking ridiculous money a few will drop their prices to get a sale, dragging down the market and this will eventually spiral downwards.
    Estate agents are getting their comeupons these days nobody is buying houses and many have been made redundant. They had it good for a while but now the party is over ….for years to come. for estae agents the future is bleek because of a move online like daft or myhome why pay an esate agent to sell your house when you can do it yourself for 125€. Estate agents will go the way of travel agents they will become obsolete in a few years. That is why the rental market is now completely online, estate agents used to have 100% of this market now they have nothing.
    The only option for Ireland is to repay the debts and adopt austerity because the EU forces us to do so, they are running the country now they want to avoid another Greece.
    As for the ratings agencies , yes they got it wrong simply because they were incompetant but at this stage they are better run so don’t shoot the messenger David.

    • Ravished By The Sheer Implausibility Of That Last Statement

      Capitalism is organised crime, and we are all its victims.

      • Gege Le Beau

        Or as good old Al Capone put it:

        Capitalism is the legitimate racket of the ruling class.

        My rackets are run on strictly American lines and they’re going to stay that way.

        This American system of ours, call it Americanism, call it capitalism, call it what you will, gives each and every one of us a great opportunity if we only seize it with both hands and make the most of it.

        • Ravished By The Sheer Implausibility Of That Last Statement

          Only at the expense of someone else, you forgot to mention Imperialism, I seem to remember that there was a bit of a kerfuffle here about that a while ago.

    • uchrisn

      Estate Agents own Daft.ie. Daft.ie produces ‘reports’. Be wary of those.

  15. Stooge politicians in league with toxic developers, toxic bankers, a weakened DoF farmed out to Merrill Lynch/Goldman Sachs ‘where were you during the boom’ advisors and other ‘financial experts’, were top feeders.

    The bottom feeders were the gombeen councillors:

    Paul Melia of the Indo hits it on the head:


    • Ravished By The Sheer Implausibility Of That Last Statement

      Our elite are amateurs and parochial in both their scope and ambition, not to mention incompetent.
      Cheney and Haliburton show us what capitalism can truely aspire to be.

  16. ocallaghanr

    Can’t we just hand the keys to the empty houses in the ghost estate over to the bondholders? Let them have the over-priced bricks and mortar and the fallow fields.

  17. Alan42

    Or to say it simply . Who rates the ratings agencies ?

  18. Gege Le Beau

    Rating agencies, ‘independent’ commentators, like physcians of old, bleeding already sick patients as part of the necessary ‘medicine’.

    Think it is apparent democracy is dead and we are slaves to the hidden hand of the market…..where government decisons are influenced by the vagaries of the various and unaccountable financial indices with unelected talking heads appearing with greater frequency in our media (timing is everything).

    Quite a world that has been created but then just ask developing countries when fuel and food prices fluctuate with deadly consequences.

    The cheer leaders of this system abound and hold positions of power and influence ‘pour encourage les autres’. Time for a viable alternative, if this monster can be created then it can be dismantled.

    Transforming the Global Economy: Solutions for a Sustainable World

    Alternative Economic Cultures

    • Ravished By The Sheer Implausibility Of That Last Statement

      May I quote Mr Noam Chomsky

      “Personally I’m in favor of democracy, which means that the central institutions in the society have to be under popular control. Now, under capitalism we can’t have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control. Thus, a corporation or an industry is, if we were to think of it in political terms, fascist; that is, it has tight control at the top and strict obedience has to be established at every level — there’s a little bargaining, a little give and take, but the line of authority is perfectly straightforward. Just as I’m opposed to political fascism, I’m opposed to economic fascism. I think that until major institutions of society are under the popular control of participants and communities, it’s pointless to talk about democracy.”

  19. Alan42

    Its a weird article to be honest . David has spent months writing articles about how bust we are and what an exoensive folly NAMA is and the madness of pumping billions in Anglo . And now he gets annoyed when a ratings agency downgrades Ireland ? I don’t get it .

    Much more interesting is the currency wars between the US and China . Here is a guy who has something to say .http://www.youtube.com/watch?v=nkux40HUTtc

    New IMF , China with more of a say and goodbye to the G7

    • Ravished By The Sheer Implausibility Of That Last Statement

      I hope I live to see the day when oil is traded with the Renminbi Yuan

    • Colin


      I think David is merely highlighting how two-faced the ratings agencies are, don’t think there’s steam coming out of his ears. What he’s asking is why are these ratings agencies being taken seriously by the markets and governments?

      If, for example, you were feeling unwell, and presented yourself to your gp, and he performed a rudimentary examination and found nothing wrong with you, yet you still felt unwell, returned 1 year later, he still said you were ok, and you still felt unwell, and this to-and-fro continued each year for 10 years, whereupon you finally collapse on the street and are brought to hospital to have emergency surgery performed on you, you survive, get well, eventually fully recover, return home……….are you going to go to that gp next time you feel unwell? What would you have to say if you then bumped into the gp on the street, where he remarks how unwell you look?

      What’s intriguing about China is how the ordinary people are treated like slaves, paid very little yet they perform like worker bees in the factories churning out goods for people in the west to enjoy, and get paid very little in wages for it. To me that is unsustainable, the workers will eventually say enough is enough, we want just desserts for our hard labour. I’m sure the yanks will eventually interfere with Chinese society, it may stir up the pro-democracy movement in China, and hope that it results in a massive civil war in China, resulting in all those greenbacks in the Chinese banks going up in flames, along with the factories and the infrastructure.

      • adamabyss

        No doubt about it. The Yanks WILL interfere in China as they see fit, by any means necessary. Overt, covert whatever. And if that doesn’t work and things get very hairy they will have no hesitation in nuking the Chineses and anyone else they need to as well. The American Empire might be dying a slow death but there is no way they are going down without a fight.

    • “And now he gets annoyed when a ratings agency downgrades Ireland ? I don’t get it”

      Me neither.

  20. Alan42

    The West has simply run out of money . I have a relation who is a recently qualified Doctor in the US . She was telling me that she had to get her parents to co sign for a modest mortgage . She earns $250,000 a year !

    • Deco

      Maybe Krugman is correct….. Maybe we should just keep printing money until the gaps have all been closed…..

      Alan – you are correct. The debt is too far above the ability to service the debt….default is coming eventually anyway….Iceland is just more honest about it than the others…

    • Ravished By The Sheer Implausibility Of That Last Statement

      Mr Osama’s cave must be ringing with laughter

  21. Alan42

    Why do people expect Estate agents to have some kind of moral code . They are sales people who get a commission based on the price of the house . Same as used car salesmen or some guy in Harvey Norman selling you a sofa . Whats the estate agent supposed to do ? Sell for a lesser price and commission ?

    The government were supposed to regulate the banks and they failed . Is it any surprise that banks went wild ? If you removed speed limits tomorrow would it be a shock if there was a rise in speed related deaths ?

    • Deco

      There is such a thing as buyer beware.

      In the late 1990s, in Ireland it became the mark of sophistication to be a buyer in a state of euphoric cluelessness. As Dan McLoughlin would boast, “I am bullishly optimistic”…..

      • wills

        Spot on Deco.

        The end of the 90′s push on the culture to go own a house and borrow cheap money and jump in for the big consumer splurge.

        And of course arrival of the euro and its magic money printing machines.

        And technology nailing paper down and cutting time out for more deals.

        And an irrational exuberance atomic bomb exploded.

        Also, the agencies D writes on above, these boyos non existant up until, what, 8 years ago.

        Also, up until 10 years ago the concept of relying on credit to get to the end of the month inexistant.

        Cultural meltdown.

        We are living through a *great uncivilizing*.

    • “Estate agents are sales people” true

      So are other people from western nations who attend defense fairs and sell weapons of mass destruction to despotic regimes. They reckon that it will take 1,100 years to clear Cambodia of landmines.

      But hey these guys were just feeding their families. It’s the good ole American way,

    • uchrisn

      Alan that is true. Business schools do not teach ethics, rather how to make maiximum profit for your boss. Leglislation and Regulation are needed to balance this especially in the area of housing.

      Markets regulating themselves is nice in theory. However when sellers know that collusion and price fixing on nessecities such as housing will make big short term profits for all sellers the market is no longer regulating itself.

  22. Irishdebate

    I had this conversation many years ago with David Andrews, a man I have respect for.. I put it to him. “The fundamental problem with democracy is, business and politicians need to get into bed with each other” – He agreed. Like local elections, most politicians can only think about their local elections and this is, I suppose one of the issues. I hate the idea that an independent in Kerry that claims 1300 euro to come to Dublin wields such power too. Massive political reform is required. There are good men (and women) in Irish politics, men (and women) that got into politics for the right reasons.. perhaps some, from their respective dynasty’s too – nevertheless, we voted them in. They are hopelessly ill equipped to deal with what is happening “on the ground” The bankers are running circles around them and big business threatens them – rock and hard place comes to mind (and before you say it, Life of Brian ) WHO has honestly offered any sort of leadership to replace this government ?

  23. PMC

    What a fantastic article David.
    Brilliant metaphor to use; Mr Dukes won’t be best pleased about this.

  24. adamabyss


    Look, I know I suggested this last year and then buggered off to America, but wouldn’t anyone be interested in meeting up before Christmas and trying to get some sort of movement going. We’ve been debating (some better than others) here for the past year or two since I subscribed and I’m sure long before. I am a student now and a man of simple means. One day I’ll go back to the Caribbean but for now I’m contributing what I can in a postive way to Irish society. It sounds romantic to storm the Dail and all that, and I wish those were the times but it’s not going to work in 2011 so the better option would be to try to thrash some proactive strategy out in person, and try to implement it rather than repeating it ad infinitum on this board as intellectually masturbatory that might be to us all. Last year Tim was very keen to meet and very kindly invited me down to Wicklow but unfortunately I was at a crossroads personally, professionally and financially at the time. Now at least I know I’m going to be a single man and a student for the next three years (or four), with a certain amount of free time on my hands, so if we could come up with some realistic aims and policies, filtered from all the marvellous work here then wouldn’t it be worthwhile to give it a shot even if we fail gloriously? Who’s interested? Adam.

    • adamabyss

      So far Colin said he’d be interested in meeting up after December 14th or thereabouts.

      • Colin

        Hi Adam,

        The meet up doesn’t necessarily have to fit around my plans, so if there is any signs of people willing to meet up, feel free to organise as you see fit.

        Maybe a better way to organise it is if you select a time and a place and offer an open invitation to anyone who wishes to meet up. There’s lots of shy people reading whats posted here and others who are maybe unwilling to publicly declare their intention to meet up for whatever reason, yet would love to attend.

        Keep at it, and best of luck.

  25. paulmcd

    Variation in RATINGS:

    While Fitch seems to agree with the Government’s figures for the total cost of the banking bailout, c. €50 billion, I note that S & P are suggesting €90 billion:


    “S&P said it expects Ireland will need to spend 90 billion euros to support its banking system, up from its prior estimate of 80 billion euros including capital used to improve the solvency of financial institutions and losses taken from loans the government acquired from banks.”

    €40 billion is too big a disparity for the Government or opposition to overlook without seeking a reconciliation of the figures or providing full explanation.

    Our children’s future is on the line.

    • paulmcd

      Assuming that credit agencies are always behind the curve, then my estimates for Anglo ALONE of 60 to 130 billion Euro cost to the taxpayer seems all the more plausible.

  26. Cowen/Lenihan: ‘Everything is on the table!’ ….Really, how about a sales tax on Cannabis?

    I vividly remember the head shops burning last year, selling ‘rat poison’ to kids all night long.

    I am sticking my head out here, fully aware that from here on I will be marked by certain people as stoned per see, and my future remarks on the economy and social political developments to be understood as under the influence.

    Legalize cannabis use in Ireland. Impose a sales tax, besides income tax for sellers, and have quality controls in the market. Why?

    First of all, let us be honest please, shall we, it was one of the first things that struck me when I came to Ireland more than 14 years ago, the amount of mainstream and professional people who grow and smoke for recreational purposes.

    From the granddad in his 70s who has his wee pipe in the evenings, to solicitors and artists, accountants, cops, (Hell yes!) nurses, you name it, the amount of people in Ireland having a joint is staggering.

    Let me be clear, you can OD on burgers, as can be seen on Grafton street daily, when you realise how many obese people are still stuffing their face with Mac Donalds and similar, and yes, excessive use of potatoes can be be fatal as well.

    The same counts for THC, particularly with extremely strong stuff like skunk and other variants around. Side effects of permanent abuse are always a factor, regardless what it is.

    However, people are using it, period.

    I propose to have it regulated and legalized. Possible revenue income streams are substantial. The other benefit is that we can assure quality, and get rid of the crime that comes along with the import and sales of dope that is diluted and mixed with ingredients that you do not want to know and hits the streets in every town in Ireland tonight.

    Instead of procrastinating and ignoring the facts, let’s face it and try to free police resources at the same time to look after real problem drugs such as heroin and methamphetamine and cocaine.


    P.S. Written under the influence of ‘Sugar loaf’ (Three assorted blends of coffee)

    • P.S. My main dealer for Sugar load is Avoca Handweavers.

      • Dutch tax authority received approx 400 million euros VAT originating from the sale of the soft drugs sold in around 730 coffeeshops. Total turnover in the soft drugs business is around 2 billion euro, a figure comparable to the turnover of Dutch public transport. (2007-2008 figures)

        There is no sales Tax on cannabis in the Netherlands, just income tax of the highest tariff and VAT.

        Assign this money to schools and home care services, NOT BANKS!

        • Zaphod

          Yes, yes and yes. Coffee shops and loads of tourists with the munchies.
          All chilled and relaxed, no desire for nastyness.
          We could do it, do we have the will?

          • At the same time, ban alcohol advertisements, use 20% of the created exchequer revenues to be put into emergency organisations, such as rape crisis centers, homeless, drug abuse centers, use another 10 % on education of USE and not ABUSE, and the remaining 70% on schools and home care services.

            It creates jobs, revenues, frees police resources, probably increases tourism eventually, etc.

            Do it right and you might even contribute a little bit in fighting the multi toxic binge drug culture that emerged and is of really great concern.

            Decriminalize normal Users, at the same time ban personal possession of amounts above 10 grams, except official dealers.

            I agree, it is very possible, in theory, and of course would face a lot of NO WAY votes, usually by people who hold their seventh pint of the evening in their hand…. ;o) Sigh

          • Folks,

            Please do not make me regret that I sticked my neck out and suggested this in a serious way.

            Look, the issue is highly controversial, fair enough, however, insulting people is not controversial….

        • It’s got my NO WAY vote. What a ridiculous idea? Would we also get VAT from the funeral services, social and family breakdown, hospital services, social work services, psych damage emanating from the abuse of drugs?

          It’s difficult enough to try to think clearly in the brainwashed world we live in without adding drugs to the mix.

          Respect your mind and the mind’s of others and help them to be drug free rather than pathetically exploiting them for VAT from their use of drugs?

          • adamabyss

            Well said, ridiculous idea. There’s enough money in the country already to educate and provide for everyone and to remove the temptation to get hooked on drugs and drink. It’s inequality in society (or at least inequal access to opportunities) that we should be tackling head on, not fiddling around with VAT to put an extra 400 million straight into the pockets of the corrupt elite, because that’s where it would end up anyway. Nothing will be achieved until we get political reform first.

          • Zaphod

            Your mind is a collection of drugs, all those problems you mention are happening, illegality makes them worse.
            You are a small minded moron, and so are anyone who likes you.

          • adamabyss

            Haha, no one likes me Zaphod so it’s ok. Thanks.

    • coldblow

      I remember attending the ‘afters’ of a wedding in Ireland (reception was in Galway) when I was here on holiday in the summer of 1978. You know, in the pub after the older people had had the meal in the hotel. I was shocked as I had never seen anything like it in England: apart from me and the brother, everyone was smoking a joint. It was a crap evening. Maybe you are right and it should all come out into the open – I hate the deceit where grown ups do this and pretend they don’t. This is a good example of the baby boomers’ refusal to accept responsibility (“Sibling Society” etc) and the funny thing is these are the same quarters where they get so exercised about ‘hypocrisy’.

      • I just think we should face the reality of the situation. Patronizing grown ups and the public is of no help and this is going on way too long.

        The numbers of people in Ireland that smoke for recreational purposes are substantial, and by ignoring and criminalizing them, they only feed the real criminals with opportunities.

        Of course, I am aware that this is a highly controversial issue, but I am equally aware on the positive aspects of regulating this as a legal market.

        I am certain however, our booze Industry would lobby with full force against such a move, go figure.

        • coldblow

          Hi Georg, yes I am familiar with the arguments and they have a certain (limited in my view)validity for sure. No, I was just wandering down an old train of thought of my own there.

          Since we have had calls here both to legalize drugs and prohibit alcohol. An appropriate resolution of the issues could be reached following lengthy exchange of soundbites in the Dáil and Seanad and on Morning Ireland (following public consultation (for the sake of appearances) and consideration of submissions from a range of interested parties), and further analysis in the OP columns and letters page of the IT, along these lines: you must wear a seatbelt and have a current NCT when drinking (subject to a pass in the theory test), cannabis available only with doctor’s prescription (normal fee payable, but with the prospect of negotiating a group rate once the scheme is up and running) and distribution to be controlled by a network of appropriately licensed pharmacies (on a voluntary subscription basis) regulated under the planning laws (contact local TD), a separate government agency to be set up to coordinate policy (including funding of relevant victims’ support groups) with a board comprising a representative range of insider interests, a subcommittee dedicated to exploring possible “synergies” with the tourist industry and a further subcommittee to deal with cross-border issues arising. It could be launched in the Coachhouse at Dublin Castle with an address from the former President, Mary Robinson and a carefully-targetted national advertising campaign. I shouldn’t give them ideas…

  27. tony_murphy

    I have just finished “The Road to Wigan Pier” when he discusses Socialism/Collective

    I highly recommend this book.

    As has been said many times on this site, to understand the scoundrels, you need to understand what’s going on in their head. Do read this book if you get a chance. Especially those Socialists who post alot here.


    It’s no wonder Prionsas De Rossa and the like loves the EU so much

    • Deco

      for another good perspective on how the EU works, try Jens Peter Bonde. Bonde has spent decades trying to get accountability from Brussels. He knows the lobbying and control that eminates from there.

      He was in a debate with Pat Cox on RTE, and Cox behaved in a highly ignorant manner continually shouting him down and making all sorts of generalizations. RTE never bothered to stop Cox.

      The European Union was formed in response to the other continental behemoth, the Soviet Union. Of course there are differences. The media in Ireland tried to make people feel thoroughly ashamed at reading a Treaty that was incomprehensible, and deciding that it was nonsensical.

      For Lisbon 2, the motto may as well have been vote yes, but don’t find out what you are voting for….And does it not feel so sophisticated to be all in favour of something you nothing about ?

    • adamabyss

      Tony, Yep, it’s a great read, one of my all time favourites. It’s amazing the lengths Orwell was willing to go to get to the truth, and the conditions and circumstances and situations he describes are truly tragic and horrific, yet humanity continues to shine through.

      Horrible to think that a large percentage of the world’s population still live in similar misery, different only in local and cultural variants.

      Have you read – ‘Down and Out in Paris and London’? Again, it’s brilliant and in a similar vein. Once more Orwell walks the walk and makes some astonishing sacrifices in order to really understand what he is witnessing and indeed becomes part of.

      Not forgetting he has an incredibly lucid way of describing events and people.

      • tony_murphy

        You summarise the book so well Adam.

        He is an exception writer. Anyone who is thinking of voting Labour in the next election, should really read this book, they will realise what a mistake that would be.

        “Down and Out in Paris and London” is next on my must read list

  28. Dorothy Jones


    In response to your observation posted at 12:38 today, I just wish to add a few thoughts as follows:

    I emigrated to Germany following qualification and worked in Berlin for ten years. I returned to Dublin 10 years ago and as of last year, I work for a German company [not a bank!!] here in Dublin.

    I am shocked and utterly disgusted at the events which have unfolded over the past decade. The croneyism, dishonesty, and disregard for us ordinary Joe Soaps is sickening.

    Commentators such as David, Paul McWilliams, Karl Whelan, Morgan Kelly et al have ben widely published and ignored and even ridiculed in the not so distant past.

    The disregard for informed commentary was is astonishing; my sister who returned from Brisbane for a short stay during the Summer asked: ‘Why has it got so bad, why does nobody ever listen to him?’ [Our host DMcW!]. With four young children, good quals. and lots of hard working experience, this family is unlikely to ever have the choice of returning to this country, although they wish to.

    Drinking beer and eating Krakuer[s] in the IFSC in the warm sunshine last Saturday watching the qeues form to the Beertent illustrated to some the strangeness of the current irish situation. The irony!.

    I remembered being irritated at times with the German civil law system, in that you are obliged to engage with the State on many issues and it can be time consuming.

    Our common law system allows more freedom and this freedom has been completely misunderstood by those at the top in Government, resulting, among much else, the abuse of powers by many Councillors in our planning system.

    Anyhow, the complete lack of accountability and sheer recklessness of a governance in which:
    -There is no accountability at ‘the top’
    -The taxpayer has no say, yet bears all of the risk
    is shocking.

    Perhaps responsibility for our financial policy should be separated, and a team put in place to plan the way forward. This team could include for the most part, persons who have both an understanding of the irish system and approach, and a thoruogh knowledge of the world economy. We could ‘beat the IMF to it’ so to speak, and do a better job.

    In terms of flaunting croneyism, the complete disregard for the personal stress and desperation of many Irish people is well illustrated in the recent for a certain newspaper. This is beneath contempt and is a reason in itself to leave the shores in disgust.

    • Hi Dorothy

      Wirklich faszinierend! :o)

      Essentially the one-tier political system that has ireland in it’s grip for way too long. I recently watched the Bundestag in the Internet, and if you ever saw debates, and it has changed for the worse there as well in the past 10 years, then again compared to the ridiculous stage managed Kindergarden in the Dail, it is an eyeopener to some degree.

      In some discussions I had with Deirdre de Burca earlier this year, we came both to one conclusion form different angles, Ireland needs a much higher dosage of true democracy and political participation.

      On these and other grounds, I firmly believe that our constitution needs a complete overhaul, as it is nearly designed to protect the cronyism and white collar crimes, amongst other inefficiencies.

      The Grundgesetz in Germany, when it still was in its major original form, was one of the best constitutions I came across. After Lisbon unfortunately, they diluted it to such high degrees, bended and twisted it so strong, that the original spirit of the Grundgesetz has been entirely lost in the process.

      Then again, events unfolding around Stuttgart 21, show that there is a deep discontent with the establishment, and this goes much deeper than the subject of the megalomaniac Trainstation of course, and I find it encouraging to see how many people from all social backgrounds, really mainstream are coming together to express their discontent and apply a healthy dose of political pressure onto the system, and exactly this i am missing in Ireland.

      I remain hopeful however, that one of these days, the irish public will take their heart into their hands and come to the streets showing the policy makers their clear and concise will, the will of an entire Nation stating… ENOUGH!

      You know, when Pat kenny tonight, short after the News made his pitch for The Frontline… I thought I do not hear right, but these guys are so disrespectful and and disconnected from the reality of suffering that they brought to this country….


      • Dorothy Jones


        Expression of mainstream discontent – yes, by all means. Some of the recent demonstrations have been organised by socialist or unfamiliar organisations [to me anyway!], which may discourage many from taking part. If there were ‘apolitical’ background, the irish public would be out on the streets in droves. Many of us feel completely disempowered in our own country.

        Grundgesetz / Constitution comments – agree entirely. Any links to a forum where this can be discussed would be appreciated in either English and/or German.

        • Dorothy – This is a complaint I addressed to Eamon Gilmore and Joan Burton, in my opinion they failed on March 30th this year, after the vote on Motion on Stability of the Banking System in the Dail, to call on people to voice their opinion and take to the streets.

          The next morning, I remember Sarah Carey’s (Irish Times) statement, she expected this to happen, she was certain someone would now ask for people to take to the streets and ‘she had her walking boots on’, ready to join the crowd.

          NAMA, and the deliberate overpayment of Banks, Joseph Stiglitz called it ‘A Criminal Act!’ and I think even today there is no better description around.

          This 30th of March was a historical date for the Irish nation, and I like to quote from Mr Lenihan’s words on this day, bold emphasize by me (source: Kildarestreet,com)

          First, we are in a position to do what we are doing today because as a sovereign State we are now fiscally stable and credible. Second, we now know the extent of the losses in our banks and the scale of the damage that has been done by the excessive lending and bad practices of recent years.

          This was 30th of March….

          The Labour Party had ample opportunities to call onto the public in an unprecedented move, they could have been a driving force to allow public expression of discontent with a totalitarian bureaucracy. In my opinion, they failed to do so.

          I agree with your observation that any extremist political currents will discourage mainstream from expressing discontent, however, I think that such a move can not be apolitical by it’s very nature, but I would think that a grassroots movement, embracing political culture from all backgrounds, would be a way forward.

          Such can be observed in Stuttgart currently, where conservatives and socialists, greens and social democrats closed ranks on these issues and put aside ideological or party political differences.

          I think what you stated about many people in Ireland feeling disempowered in their own country is very important, and it is something I observe in my discussions with members of the public all the time!

          A grassroots movement is what we need in my opinion, and it could start from very simple ideas such as: If you disagree on the government policies of insane IMF style austerity measures bailing out banksters in favor of European Central Bank Interest, Private Investors, German Banks and Invisible bondholders, open your window every day at 3PM, go on the street, wherever you are, at home, at work, on the streets, in a car, and start to whistle, honk, shout, beat on pots and pans, whatever tool, but make noise for 10 minutes …. every day! Ideally, such would happen in front of Government Buildings, Bank Buildings etc.

          This is what they call the ‘Schwabenstreich’, and it is happening every day now, and get’s louder and louder….

      • That frontline program was disgusting

  29. Dorothy Jones

    …Seond last sentence should read ‘the recent ad for a certain newspaper’ [cupboard..]

    • Deco

      We are also sick of him. Rupert Murdoch owns the newspaper concerned. Beer and Circuses. And the novels and the advance sum of money.

      You are right. The Irish system as it currently exists is designed to kill meritocracy. Meritocracy is the enemy of the state and the private sector.

  30. Malcolm McClure

    Sub: (I just can’t find any inspiration in rehashing old stories.)
    “He who puts hand to plough etc. etc.”

  31. lff12

    Good point, and I think it applies to other so-called “professional” amateurs of finance, such as mortgage brokers, rental agents, but most particularly auditors. How in hell were Anglo able to sign off their bare-faced insider dealing sweetheart loans? How in hell were they and PTSB able to shuffle cash about with impunity. Arthur Anderson is now a shell of the company it once was thanks to its part in the Enron and Worldcom scandals. Whoever signed off the so-called accounts for Anglo in particular should be struck off with immediate effect.

    Perhaps if the various banks accounts were properly audited we would actually have some idea of what their true values and projected incomes/losses are and be able to plan accordingly. The fact that this isn’t being done is testament to an entire country full of bad accountants and zero governance.

    • Dorothy Jones


      A cursory glance at the NAMA website [Award of Tenders] is a clear indication that the ‘professional amatuers of finance’ to which you refer continue to be rewarded not punished.

  32. Avoid False Ratings Prophets :
    This is the above heading of this article .Trying not to be false about what lies ahead before the Christmas Pudding .Our energies will need to be more focussed on whether we can roast our goose this year and eat it cooked .The week before Xmas day is foreboding a ‘frustration of energy ‘ all around us .This is serious especially because of the seasonal time of the year it happens to be and the damage it can cause easily.It can be a lack of energy and/ or the sudden explosion of it .Either way this manifestation is dangerous and fatal .
    In economic terms the possibility of the following may arise :

    Another Volcano
    Nuclear Power Plant
    Shortage of Energy Supply
    Aviation Chaos

    On a social level it can mean :

    Failure to Implement Government Policies
    ( eg serious rebellion against the new budget )

    Social Attacks

    Like same time last ( as I predicted then on this site ) year the events are similar but not the same .There will be magnificant pulls but with less planets engaging in same .Instead it is more about a ‘ twisted gut’ like an apendix , and with lots of pain where the energy is trapped and eventually forced to explode .


    Kown will crack his head
    Lenihan will lose energy

    Michael Martin may gain points from these events

    A new leader will rise from nowhere from the benovalence of the earth energy and his recognition will not be identified until middle to late january 2011 .

    Domestically ( in the kitchen speak )

    Get Your Hot Water Bottles ( as I said last year )

    Appliances may break down ( oven / cooker )
    Coal / Fuel demand may increase ( so buy now )
    Car Repairs done now
    Insulate Home
    Gas Appliances are more dangerous now

    Finally :

    Drive Slow and Go Slow ( very seriously )

    Dangerous Period :

    18th December to 26 th December 2010

  33. Here’s an interesting link re the relationship between secrecy/transparency and corruption in the banking system


    To echo David’s points re ‘what were they saying during the boom’ Well, here’s exactly what Moody’s were saying about the Irish banks during the boom.
    Mind your gagging reflexes:

    Moody’s bank financial strength ratings (BFSRs)

    Following report by Pat Boyle, April 24 2007


    “The two major banks, AIB and Bank of Ireland, both had their rating upgraded from Aa3 to Aa2, while both Anglo Irish Bank and EBS Building Society were re-rated to A1 from a previous rating of A2. Irish Life & Permanent was moved from a rating of A1 to Aa3.

    Most of the other institutions had their existing rating affirmed, these included First Active, Hewlett Packard International Bank, Irish Nationwide Building Society, Ulster Bank and Zurich bank.

    The Bank Financial Strength Rating (BFSR) applied by Moody’s represents the agency’s view of the bank’s intrinsic safety and soundness and excludes certain external credit risks and credit support elements that are addressed by Moody’s Bank Deposit Ratings.”

    By a simple process of deduction one can deduce from the above that Moody’s agency ratings are intrinsically unsafe and unsound!

    • coldblow

      Alice in Wonderland stuff. Anglo rated A1!! Around this time (mid-2007) our host (Generation Game) had referred to Anglo (I don’t think his publishers wanted him to name Anglo for legal reasons)thus:

      “one of the big Irish banks is simply a leveraged hedge fund betting its own and its clients’ money on overvalued property”.

      This has all been said before but as the advice given to people dealing with personal issues goes (or so I have read): write it down or it never happened. When Germany was bombed into the ground in 1945 the people apparently suppressed the memory as it was too painful. The Famine wasn’t talked about too often by later generations either by the sounds of things. So let’s not forget what these people have done either.

    • uchrisn

      Did you see their ratings for some of the Chinese banks in 2007 – which posted record profits during the crisis.
      Good job lads, Thanks for warning me not to invest in those shares.
      Although curiously Goldman Sachs bought a large stake in ICBC around that time. Were they mad ignoring the credit agencies like that? The profits from China have basically kept Goldman going better than their peers.
      UBS a Swiss bank also invested in Chinese banks despite them getting bad ratings from agencies.
      Basically the Chinese banks are not really bothered about getting good ratings as they have enough money and are not desperate for foreign investment. So they don’t bribe, sorry I mean pay, its offical bribery, the rating agencies.

  34. coldblow

    Michael Hudson’s latest:


    Basically he is saying that US QE is not having the intended effect (ie reviving the domestic economy as people are more interested in paying down debt than borrowing even more) but is rather causing chaos in world financial markets by providing opportunities for financial predators and leading to a flood of financial speculation. This might explain why, for example, Brazil is booming right now?

    “What is to stop US banks and their customers from creating $1 trillion, $10 trillion or evn $50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other assets for sale, in the hope of making capital gains and pocketing the arbitrage spreads by debt leveraging at less than 1% interest cost?

    “This is the game that is being played today.”

  35. @paulmcd


    Tried to post reply re Anglo bearer bonds, but it disappeared into the ether. So I’ve blogged on it above. Thx

    • wills

      Nice one, thanxs cbweb.

    • paulmcd

      Everyone should read this.

      There is also the possibility that “Institutions” invested in the bonds of our zombies may be on the Interpol list of finance houses suspected of money laundering.

      This is why the information on the names and addresses is so vital.

      Well done and thank you, cbweb.

  36. wills


    China floods markets with products.

    EU sets up Euro.

    Go for it, flood cheap credit to chase explosion of consumer goods.

    Rating agencies take center stage like a policeman directing the credit traffic.

  37. wills


    On your post with ALan42 and debt.

    I reckon the debts racked up are then sent over to the national debt of each country and this is more or less a built in *hidden debt delete system* but not officially recognized as one but within the insiders space implicitly understood that the debts once sent over to the national debt are done and dusted.

    Take for example NAMA. NAMA is actually a trojan horse to move debts which are private one way or the other and move them. Move the debts thru NAMA thru NTMA thru ECB thru and onto NAtional debt of Ireland.

    Debts are then considered neutralized.

    Then the insiders create cuts and retraction of credit and worry in order to get away with the stroke.

    • wills

      Its like an insiders two card trick.

      On the one hand the debts clogging their rigged system are now plumbed outta their system, the monies released from the debts stashed. These debts are moved with one hand.

      With the other hand the insiders play around with *confidence* in the culture and media and day to day chit chat and this confidence panto is a trick with the other hand to make happen the debt plumbing removal sleight of hand.

  38. paul

    adamabyss has put the gun to the collective heads and no-one has responded,except colin to basically say “you’re on your own mate”.
    This is getting more like the bar in killinascully every day,lots of talk and no action.
    Is it a case of the man who fell into the vat of Guinness…”I know exactly what to do, I just don’t know where to start”?
    Or is everyone on the ganja and staring into the toilet after the event?

    • coldblow

      I don’t think anyone knows what to do. While there seems to be agreement on a few things there’s disagreement on more.

    • silentobserver

      Paul, it’s simply too late. If there was ever a time to develope a cohesive group to undermine NAMA, and let Anglo go etc, it was before March 30 this year. A few have tried, but not enough critical mass. I get a sense that public opinion at present is a bit like petrol fumes, it needs a spark to set off explosive, or significant change. I can see no other way, because the change required is so dramatic. Not just a change of government, but a change of cultural norms, and law to instill a true sense of responsibility in leaders, and real and penal consequences for failing to forfill duty, at all levels within both the public and private sector. I work in the health sector, and can see the same problems of power without culpability in healthcare, just like there has been in finance. I was trained in Australia, and it amazes me how there is simply no legal demand for competency here. I have seen patients with obvious pathology that has gone on undetected that have been missed by hospitals etc. I have literally begged some of these patients to complain, but they refuse, for fear of rocking the boat. I do this not out of vegeance; but simply to change the system, so it doesn’t happen again. This type of thinking- “don’t rock the boat”, don’t demand too much, because it might come back on you, seems to be a big part of the paralysis and lack of action that is being witnessed. “If NAMA doesn’t go through will my house be worth less? If we don’t support the financial system will my public sector wages/ social welfare be more detrimentally effected?” This dis empowerment type of thinking, to me seems to be one factor in many that is stopping any true protest with conviction. Until the gall that is felt reaches fever pitch, there will be no change. And when that happens I think the damage will be much worse than has already been witnessed- probably when the IMF is bought in. The only effective protest I have witnessed here has been the pensioners over the healthcare card- a group that probably has the least skills in “social networking” technology. We are living in interesting times for Ireland. I think the country will sink much lower before that raw demand for justice will be collectively expressed. Maybe then our right to protest and responsibility with consequences will become a part of the collective consciousness!

    • Colin

      Just for the record, I’d be happy to meet up when I’m around, you’re not on your own there adamabyss. I was trying to be accommodating, not egocentric.

  39. Gege Le Beau

    Forgive if rambling……….just responding to Dorothy Jones and Georg R. Baumann.

    I am neither shocked nor thankfully despairing too much (as a result of circumstance but also decisions I made), I do of course wish the 500,000 on social welfare had more support and employment solutions, that is so obvious I was almost not going to say it but government policy is determined to force them to the airports or into quiet desperation.

    Despite everything, I am actually quite optimistic, I think things had to come to a head, the runaway train that was the boom had to come off the tracks, thankfully there were some sounding the alarm bells, like the big public figures mentioned, but in the trenches of everyday life there were sages too, people of common sense for those who had the strength to pause amidst the madness of crowds.

    History we have learned is critical, economic/financial history even more so, and David McWilliams has penned quite a few articles drawing on some terrific historical parallels (especially liked the comparison with the collapse of the Mayan civilisation), and this we too should be thankful for.

    Unfortunately for the masses, who for a whole host of reasons engaged with the madness that was the period 2000-2008, many now carry a heavy burden and cannot benefit from inside connections so they can avail of multiple jobs, claim multiple pensions or pen articles for national newspapers on the ‘big game’. There was a big game alright but it wasn’t played in the Aviva stadium.

    For those on the Left, the democratic deficit, the poverty and the life struggle that is an existence for so many people, the realities has always been evident (a lot of the talking up of the economy appealed to the middle classes which Fianna Fail used to draw on so heavily to put it over the top), the unsustainability of the economy was also on the radar, the only difference now is more people are affected, and the madness that is neoliberalism, which was sold as a miracle economic panacea, has come home to roost.

    And yet out of this apparent crisis there is an opportunity like never before to chart a new direction for the country, but I think to really achieve this the ‘ancien regime’ which is holding on by the skin of its teeth, desperately trying to cover its seedy tracks, needs to fall and fall hard. We cannot go back to the old ways, we need new, viable and sustainable socio-economic plans. I agree with the comments here and elsewhere for a grass roots, bottom up approach, also echoed in the article in today’s Irish Times (see link below).

    Ireland is essentially a conservative country (with people drawn of course from far left to far right) but mainly it is conservative, not too much of the right, not too much of the left. I think the concluding paragraphs in this article may well be what we can best hope for in terms of creating more of a republic than an ‘Ireland Inc’, where people are for once but at the centre of decision making and not the vested interests or insiders.

    “Our challenge over the next 10 years is to bring about a cultural, economic and psychological revolution, where the broad left achieves a majority position in government and is supported and challenged by a movement of civil society that ensures the delivery of greater equality, employment, support for small enterprise and most importantly addresses the breakdown in our society where suicide, depression, youth violence and bullying, and the marginalisation of the vulnerable have reached crisis levels.

    Now is the time for those who are articulating these perspectives to come together. But the old ways and language, the narrowness, the negativity, the purist, dogmatic approaches must be cast away and the space opened for new approaches, new ways and new dreams. Citizens assemblies and referendums are required to develop a new society from the bottom up.”

    Iceland is interesting in this regard, it changed its government, and is putting its leading politicians and bankers on trial, including one who is holed up in London but I believe on Interpol’s list.

    After the lotus induced coma of the Irish boom, people are angry, frustrated and talking about the country in the most surprising ways, it is inspiring, today I heard of one lady who said: ‘they are holding on to power, democracy is dead in this country’, such a comment was almost unthinkable in 2007.

    Without trying to sound too dramatic, Fianna Fail have shown complete contempt for the democratic process but their actions actually serve those who seek to take power from their hands and rebuild this country in the image of those who gave their lives for the true ideals of a Republic. Fintan O’Toole quoted Padraig Pearce in his article today as well, and I think it is worth re-quoting given its applicability to the Ireland of today,

    “THE MEN who have led Ireland for 25 years have done evil, and they are bankrupt. They are bankrupt in policy, bankrupt in credit, bankrupt now even in words. They have nothing to propose to Ireland, no way of wisdom, no counsel of courage. When they speak, they speak only untruth and blasphemy. Their utterances are no longer the utterances of men. They are the mumblings and the gibberings of lost souls.”

    I think what has happened was predicted and inevitable, I feel sorry for those hurting but I am energised by the possibilities that may yet come after those stifling the State, those crushing the democratic spirit are thrown out once and for all (ending 70 years of Imperial FF rule) out of office kicking, screaming and scratching around for ‘their’ few euro.

    • Gege Le Beau

      Here is that article, Moral of the Mayan Meltdown, with memorable lines like:

      “So the Mayan society collapsed because there were simply too many people abusing their world’s precious resources, unable to see that in their headlong dash for more luxuries and frivolous spending, they were ensuring the depletion of their resources and sowing their own destruction.”

    • Deco

      I remember reading an article in the IT, not that long ago in which Tintan recommended that his ILP pals get behind Bertie Ahern for Taoiseach. He also euologises tax dodgers like U2, while writing powerful language to rip into small scale tax dodgers. I cannot take Tintan seriously.

    • Dorothy Jones


      Good inspirational stuff! Agree wholeheartedly with the idea of working from the ‘bottom up’, and working with a few ideas / groups at present to develop opportunities at a very simple level.

      The predictability of the situation as you outline is my understanding also; the writing was on the wall there all along thanks to certain commentators.
      The shocking part is that it was completely ignored.

      I am however a bit wary of the phrase ‘grass roots’. Not because of how it appears in the context of your text, but simply because of the negative [my perception anyway] associations with regard to the Irish political system :~)

      • The Natural Order as revealed by tradition in Ireland allowed control to be harnessed by the people and respect and reverance to how we conduct our daily lives .This embraced the old Irish Laws as practiced in another time and has evolved in Iceland subsequently .Thus the absence of Royalty.
        In the EU there is a polarity of intent and purpose and who receives and gives .Essentially all decisions are made from the top by a team of faceless , lifeless and inept vanguards of selfish deeds.

        Logic will always remain DEAD while laws are defective as they are legislated in Ireland where banks and business / ordinary people are concerned.Until these are redressed nothing will ever happen .Thus the ability of the grassroot to do something is extremely difficult because there are no field rules and thus nothing to achieve .

        Laws here are not legislated as republican true spirit and social conscience and neither are they central government with a top down rule progression. Rather instead they are mix match and a blunder of neither this or that that ends up down a vortex to nowhere. That is now where we are ie ‘ down a dark hole’.

      • Gege Le Beau

        @ Dorothy, what I have in mind is not at all reflected in the current Irish political system, where people are kept far from the decision making, but lobbyist and PR people are welcomed with open arms.

        A truly democratic system was never established, it was crushed (remember Dev’s line ‘Labour must wait’).

        We live in fast changing times when a ‘tweet’ can prove a game changer, who knows what is in store, the people have been awoken by economic necessity, very hard to put that back in the box, every move is being scrutinised by the ‘silent majority’. FF plays with fire currently, and things can get rough as the end comes closer, they will not go easily or quietly, so hell bent as they are with holding onto power, I suspect they fear more damaging and compromising revealations which could totally eclipse them as a political force.

        • wills

          Hi Gege.

          Surely the Irish constitution is an establishment of a democratic Republic. Look at Article 45 how democratic is that it is pure brilliance in relation to democracy and its functionality in the real world.

          • Gege Le Beau

            I think the old ways are so tainted nothing but a complete overhaul will suffice incorporating the best elements of the old one with the needs of a modern, progressive and equal Republic, needed especially people are to have faith and belief that we are on a new road.

    • wills

      Gege Le Beau.

      Good comment there.

      The 2nd last para I contend is balderdash.

      “THe Men who led Ireland” etc para is rubich.

      The men / insiders are not doing evil they are playing JACKPOT.

      They are NOT bankrupt in CREDIT, they the insiders are loaded.

      They are NOT gibbering idoits on the contrary they are clever dudes.

      • Gege Le Beau

        Hi Wills,

        On that 2nd paragraph…..

        That was a quote from Padraig Pearse circa 1915 which O’Toole quoted, Pearse was lambasting John Redmond and his decision in his Woodenbridge speech to back the British in their fight with the Germans, a decision which ultimately cost thousands of Irish lives as many signed up, like my great-grand uncle, to fight in the hope that the British would grant Home Rule.

        • wills

          Hi Gege Le Beau.

          Yes, ok, its referencing the brits.

          But, still, I so not consider those statements from Pearse as accurate.

          The Brits are not bankrupt in credit and prone to utterances of the nature Pearse referenced.

          The thing is if anyone is serious about neutralizing the realities D defines then one must examine the realities forensically and this 2nd last Para and the quote is rhetoric misguided.

        • wills

          Gege Le Beau.

          On the quote referencing Redmond too I think its misguided.

          These characters who carry on like they do whether its redmond or brits or banksters or property developers etc, putting self interest ahead of the community
          is the common characteristic they all share.

          These guys doing this carrying on like this are slick operators and know how to move in social quarters and pour honey into ears and apply cool intelligence to secure what they want at any given moment in time.

          They are very well adjusted characters and very able and quick of foot and with great ease of charm and wherewithal.

          • Gege Le Beau

            Wills, as is often with debates and points made here, we’ll have to agree to disagree, I think Pearse was right then and the words are equally applicable to today, the plans of the banksters, their political assistants and all the other hangers on have finally been laid bare, and about time. It is a time of great awakening.

    • Deco

      { Ireland is essentially a conservative country }

      Nonsense. I would rate Britain as the most liberal country in Europe – much more so than the Netherlands or Sweden. And Ireland is next in line.

      Ireland is conservative compared to Britain.

      ‘Conservative’ in Ireland is a public term of derision. You will never hear anybody claim in public to conservative at anything.

      And with regard to finances, the Irish are amongst the liberal people you will find anywhere on the planet….

      • Gege Le Beau

        The ‘conservatism’ is evident all around us, look at the current general strike in France, they are putting the government under serious pressure, this FF government should have been forced out long ago.

        How many times have you heard people say over the last two years that we are meek, quiet, that we accept almost unquestionably, that is my definition of conservative, the silence, the fear, the keeping the head down. As for Britain etc, think we got to get our definitions right, fair enough millions came out to protest the war in Iraq, we will see Union and workers reaction to the British austerity package. At least, the Greeks, the French and the Continentals seem to have less fear and more action about them.

        As for the Irish being ‘liberal’ with their finances, I am not sure what this means, if I have a sense of what it alludes to then it may not necessarily be a positive given those who walked into seriously inflated mortgages while thinking they were taking on an asset.

      • Gege Le Beau

        With Browne on this, think he nails it

        And so it’s agreed – we will change nothing

  40. Gege Le Beau

    Story raises its head again

    “Last May, when ABN Amro Bank (now largely part of the Royal Bank of Scotland) was caught funneling money for the benefit of Iran, Libya and Sudan, it was fined $500 million, and no one went to jail. Last December, Credit Suisse Group agreed to pay a $536 million fine for doing the same. In recent years, Union Bank of California, American Express Bank International, BankAtlantic and Wachovia have all been caught moving huge sums of drug money, but no one went to jail. The banks just admitted to criminal conduct and paid the government a cut of their profits.”

  41. StephenKenny

    It’s a nice piece Gege, and for those such as myself, very nostalgic.
    My problem with the whole grass-roots rhetoric is that no one every turns up, leaving it to the political activists, to take all the decisions, which, if memory serves, was the whole point of these suggestions in the first place.
    Being an engineer, rather than a admirer of popular rhetoric, I have to wonder who would write the agendas of these various grass root bodies, and what the quorum for any decision would be. Who would pay the support staff that such bodies would need, and what powers of exclusion those elected would have.

    If there is one thing that we have surely, surely, learned over the past 10-20 years is that the devil is in the small print, not the delightful headlines, be it for getting a ‘new start’ from a debt consolidation loan, or a ‘new start’ from a recycled political dogma, grassroots and all.

    Simply blaming the political classes, with a nice popular jab at the British, will not do. It really won’t.

    In my view it is not that the people were blinded by all this, it is that the people don’t really care too much about the nation. They seem to view it as something to be ripped off, in one way or another, when the going is good, and then to be deserted when it gets tough.
    When you think about it, this approach is very similar to that of the financial system: Grab all you can when the going is good, and leave it to someone else when it gets tough.

    It seems to me that until this changes, nothing else will, although citizen’s assemblies and worker’s councils will keep the committee management enthusiasts happy for a while.

    • wills


      Absolutely concur with that. If we are to really really really define the realities of what we are facing in relation to how our society is organizing itself and behaving on a day to day basis then this must end up with examining cultural moral modus operandii and its exigencies.

    • Gege Le Beau

      Think I see where you are going: nostalgia, rhetoric, people incapable of coming up with a plan of action (I have more faith in people),the logic of an engineer etc – instead of jumping in why not go away and reflect on it, I am sure you’ll come up with something, don’t engineers pride themselves on coming with solutions to the most difficult intractable scenarios, just think trapped Chilean miners.

      //In my view it is not that the people were blinded by all this, it is that the people don’t really care too much about the nation. They seem to view it as something to be ripped off, in one way or another, when the going is good, and then to be deserted when it gets tough.//

      Cynicism seems to have got the better of you, I can understand that, however, despite everything I still believe in people, all is far from lost but as stated for change to come the situation had to come to a head.

      Interesting to see Vincent Browne’s programme this evening, Richard Burton shifting in his seat when confronted with proposals to ensure the rich share more of the burden for this crisis, the efforts to tackle the rich professionals, reverse the scandalous deal on Irelands Western resources (oil and gas), an increased tax on people making over 100,0000 per annum, a possible increase in the corporate tax rate, the closing off of loop holes for those who avoid paying tax – if austerity is going to be implemented make it equitable – no, none of this can be done according to Richard so the axe falls elsewhwere on the poor, the unemployed, the blind and disabled, they can all be tackled.

      We suffer a failure of imagination, a failure of political will in this supposedly worst financial crisis Ireland has ever faced, with each passing policy it seems hard to believe, it is more like an attack on working people and effort to role back the achievements of the Labour struggle, the imposition of austerity which lands on those who played no role whatsoever in creating this debacle.

      As for citizens assemblies and workers councils, they seem to be having a remarkably positive impact from Venezuela to Bolivia, real bottom up democracy, they way it was intentioned. At the height of Athens golden period, it had the same population as Cork City, there is no reason why we cannot at the very least experiment with this thing called: democracy, a Greek word denoting rule of the people, well lets put it into practice to its fullest not least extent.

  42. wills

    Davids article I think is spot on.

    Culture and society is malfunctioning and this article of Davids is literally holding up to the light the utter madness of what purports to be the day to day business of the community going about its diligent work day.

    Lets ave a look at other exapmles of MAdness.

    Why are houses still seriously overpriced in this country?


    Why are the media still dealing with what happened as if its all just an accident and will be over soon and we can do it all again?


    Why are the mainstream newspapers not held to account with their newspaper property porn which fanned the flames?


    Why did NAMA take so long to give the developers the chance to transfer their wealth over to their wives?


    Why are their 800 new quangos in the last 10 years costing ireland 8 billion euros per year?


    How is it that it cost 400 million euros to build a convention center?


    Madness everywhere in this country and it goes about its daily business as if its all grand and its not really madness really tis all just a misunderstanding of some sort.

    Why is it that empty properties in abundance in ireland and rents and house prices are still insane.

    MAdness in abundance everywhere, delusional thinking in charge calling the shots telling us the news telling us another property boom is going to save us all.

    What is going on here?

    Why are the house prices not coming down.

    What the fcuk?

    Why is that chisler parlon on RTE news and spoken to as if he is yoda.

    Messed up.

    • Deco

      Because our advertising sponsors want it to be so…

      If you were overpaid and working for RTE you would be more than willing to please ‘our adveritising sponsors’.

      Most people ignore advertising. The point is not to get people to buy your stuff. The point is to have Radio DJs and RTE programs saying good stuff about you, and not saying bad stuff about you.

      As a corporate concdern, you buy advertising, and you get favourable coverage…..people believe the news (what muppets!!!!)…Roll out Dan McLoughlin there on SixOne….”bullishly optimistic” (again)…

      It has worked for years for AIB. In fact, were it not for the fact that Tony O’Reilly is so filthy rich anyway, and that Senator Shane Ross is so popular, we would probably be none the wiser concerning AIB, and their scandals…..

      • Deco

        Compare the level of advertising from AIB on the Sunday Indo, compared to RTE.

        It is fairly obvious where AIB buys influence…apart from the contrast in news coverage….

        Also compare historic coverage of Anglo during the boom in the Irish Times, and advertising levels from Anglo in the Irish Independent. Anglo only ever had ads in the Irish Times. Of course after Anglo went bust, it was more important to criticize Anglo than give it favourable coverage….

        • coldblow


          Interesting. I never copped that. When I joined the CS 15 years ago I was intrigued that everybody (absolutely no exceptions) used to read the IT on their breaks. In those early days I once made a passing remark in conversation with an Asst. Secretary that I never read the IT and he told me that he had been given to understand that you wouldn’t get far promotion-wise if you let that be known. I won’t read too much into this, seeing as most of the alternatives are the tabloids (enough said), but it struck me all the same.

          Re our financial nutjobs, over the years I picked up the odd snippet about Fingers and the other BS executives earning over the odds, but the first real glimpse into the cesspool came with Shane Ross’s articles in the Sindo about Eithne Tinney’s battles with the EBS a few years back. It was somthing I had suspected but heard nothing about. The inside story only really came out in the end because there was no way of covering up any longer.

          Speaking of Fingers I read in the Sindo that he has not repaid the €1m bonus as promised a while back. You really can’t take your eyes off them for a minute!

  43. paulmcd



    “The Treasury Department estimated this week that TARP may cost taxpayers as little as $51 billion, less than half what it took to clean up the 1980s savings-and-loan crisis. The cost could shrink to $29 billion if the U.S. reaps expected profits from its other, non-TARP aid to insurer American International Group Inc., it said.”

    If we take a mid-range figure of $40 bn as an end-result and scale it down for Ireland’s smaller size, then, in Ireland’s case the final cost would be 40 bn/80 = 500 million dollars = 360 million euros at today’s exchange rates.

    • paulmcd

      Remember S & P projects that Ireland’s bailout will cost, not 360 million, but 80,000 million.

      My best case scenario for Anglo ALONE is 60 thousand million euros; and this assumes that the original pre-NAMA 72 bn book value of Anglo’s debts will be 100% recovered over the 12-year time span envisaged.

    • paulmcd


      RBS made a small profit of £9 million for last financial year. Without Ulster Bank, the small profit would have been £360 million.


      Ireland, post-meltdown, has become a test-tube for reckless debt mismanagement which will certainly end in DEFAULT.

      Brian LENIHAN’S aim seems to be to bail out all the FF cronies as quickly as possible.

      He is getting away with it.

      IT IS NOT TOO LATE; but by the time people are on the street screaming STOP, STOP, STOP!!! . . . it will THEN BE TOO LATE.

  44. Deco

    I have just read the following comment from US Federal Reserve Dallas President Fisher.


    Now this is a very serious comment. Especially from the US Federal Reserve. Basically, he is saying that the Keynesian economic stimulus plan being pushed by Obama and all the big bosses in the US Democratic Party, endorsed by the US media, and cheered on by Wall Street – is worse than a waste of money – it is providing capital for competitors of the US to further undermine the livelihood of American workers.

    In other words, Keynesian economics, is diametrically counter-productive.

    I expect to see him reassigned shortly….You cannot make everybody look really stupid, and expect to remain in the same position where you might do the same again…


    This is important, because in Ireland and the UK, there is a persistent level of promotion and positive commentary about Keynes as the economic Messiah.

    I have been saying that the current US Federal Reserve policy is causing a bubble in Asia. It would seem that this is now being evidenced.

    The US now has two options.
    i) It can admit defeat and go through a deflationary period, but eventually come out strong again, after a prolonged period of weakness.
    ii) It can ignore this warnings, and follow the Krugman doctrine, that the best way to recover from the collapse of a bubble is to create a new bubble.

    This probably also validates the Austrian Credit Cycle Theory as being inevitable and unavoidable. I think Fisher will be sacked, because he is making Obama look like a lawyer in an economics conference. (a bit like what Constantin Gurdgiev does to Kildare Street politicians when he is arguing with them….)

    • Deco

      Here is the quote

      I can also see that if Ireland is kicked out of the Euro, it is by no means a panacea.

      It does suit a lot of people to choose contemporary thrills and lifestyle over capital formation that is beneficial in the long term. In fact, in the English speaking world, there seems to a torrent of voices who defined modernity on absurd terms, whilst failing to understand the fundamental requirements of a modern economy.

      In this context, in Ireland, I expect the cure that will emerge to be as bad as the disease. And one stupid policy (driven by the GP and FF) will be replaced by an even more absurd policy (ILP driven with support from either FF or SF).

      Contrary to the advertising that we are being sold by the media in the mode of manufacturing of consent, I reckon the future will be an unfolding series of disasters.

      As long as we blame it all on Seanie Fitz, we are destined to walk down into another completely different path of failure…..

    • Deco

      “… In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin. We will have to watch the data as it unfolds to see if this is momentary fillip or evidence of a broader trend. But I wonder: If others cotton to the view that the Fed is eager to “open the spigots,” might this not add to the uncertainty already created by the fiscal incontinence of Congress and the regulatory and rule-making ‘excesses’ about which businesses now complain?


      • coldblow

        Deco, my link above to Hudson’s most recent article throws light on this. As I understand it the QE stimulus money is not being used by the banks to invest in the productive domestic economy (too risky, poor prospects) but is being channelled by them into lucrative foreign ‘investments’, eg bonds, stocks and currency speculation – all on the back of freshly minted fiat dollars.

  45. wills


    Here is an excellent article on ART fraud and it reveals the level of skullduggery a fraudster will go to in order to get away with the scam.

    Now think BANKS and PROPERTY and RATING AGENCIES when you read thru the article in the NY TIMES. I’ve surmise the main points.


    #The British prosecution office declared Drewe a menace to Britain’s cultural patrimony.

    #The scandal has not only upset the market for the artists Myatt forged, but it has also exposed the art industry as its own worst enemy — too reliant on sources of authenticity that are vulnerable to manipulation and riddled with conflicts of interest that invite corruption. Drewe’s story says less about his own brilliance than about the readiness — if not the willingness — of the art world to be deceived.

    #”What distinguishes this case is how methodical Drewe was, and how well he understood the process of validation. His manipulation of the system is as interesting and troubling as the forgeries themselves.”

    #”I was flattered into thinking I was a man of importance,” he concedes he had an ”abiding sense of unreality, that this wasn’t really happening, that this would all end in tears.”

    #”There is the line that modern art pretends to be things it’s not,” says Sandy Nairne, director of national programs for the Tate Gallery. ”There is a crossover between the way Drewe perpetrated a con with the cultural view that modern art may be viewed as a con on the public.” There is a sense, Nairne says, in which Drewe was simply ”making up modern art.”

    #A forger’s chief motivation is typically intellectual gamesmanship. Embittered by the spurning of his own work, he takes satisfaction in suckering the entire art world en masse, then pulling aside the curtain, exposing himself as a renegade genius and the art experts as the frauds and fools.

    #I had no idea what a false provenance meant.” Stoakes pauses, then concedes his own gullibility. ”I wanted to believe him. He was a male friend who was going through what I was going through. He sussed out what my weakness was, both with the romance and the possibility of making money. But it was the idea of a very old friend in a friendless world.”

    #It is the provenancing that distinguishes Drewe’s scam. ”People don’t think a forger is going to go to such great lengths,” Bevan says. ”This was a full-time job. Drewe chatted up the families of the artists to find out their domestic details, their love lives, so he could write antique letters — from de Stal to his lady friend, for instance, in 1950 — as part of the provenance.” Alan Bowness, former head of the Tate and the son-in-law of Ben Nicholson, was fooled into authenticating two of Myatt’s fake Nicholsons, not because the pictures were good — in fact, the general consensus was that they were unimpressive at best — but because the provenancing was flawless.

    #’The auction houses get stung from time to time because of the volume they deal with,” Hoving says. ”In general, they simply don’t have the time to confirm the authenticity of everything. The amount of things they deal with is awesome.”

    #Those paintings, too, had come with convincing documentation, including,
    according to Nahum, supporting letters from Alan Bowness, the world’s top Nicholson expert. In flusher times, provenance is often checked more thoroughly. But, compromised by the necessity to move product, experts sometimes can’t afford to look too hard; thus, the poisonous combination of raw commercialism and the desire for discovery.

    #”When a forger is as successful as Drewe was, it’s not one person who’s corrupt, it’s not one dealer. It’s a whole system that has failed. A lot of checks and balances that should have connected, didn’t.”

    #Myatt had also become repulsed by how Drewe preyed on the vulnerable, the dead and the dimly acquainted to concoct art owners. Drewe had used Myatt’s dying father’s name on some of his fake provenances; he had done the same with Stoakes’s. He had even cannibalized portions of his own mother’s will.

    #”all-consuming drive to pull the strings — hence his title ‘puppet master’ — has left him unable to live outside his own version of reality,” says Detective Constable Inspector Miki Volpe, a 22-year veteran. ”He’s a verbal bully who thinks he can manipulate anyone. As you start to learn more about this man, you realize the enormous web of deception he has spun. . . . He was certainly the most devious character I had ever come into contact with in my service.” Drewe was released on bail and immediately disappeared.

  46. paulmcd

    Lenny the Liar on Bloomberg yesterday:


    Brian, could you not tweak the corporate tax rate up from 12.5 to 12.75% – just a wee token from the corporates to help pay for community projects?

    • Gege Le Beau

      The fact he is powerless to move it to 12.6% belies the fanciful tale that the corporates are here because they think we are special or have some historical/family/DNA connection (a common Irish ancestry was even mentioned), they are here for the rate of 12.5%, full stop, hence the impossibility of changing it, push that up and you’ll see the true sentiments quick enough. Corporate Boardrooms aren’t love ins.

    • paddythepig

      Why not reduce it? It might bring in more investment.

    • paulmcd

      Brian, In the unlikely event that you would follow my suggestion, then, in keeping with the description of our recession as a period of “negative growth”, you could describe an increase in tax as a “positive contraction” in the taxation rate.

  47. Skidelski lecture,


    Did not the one big room convention centre cost €400 and the set aside for the 16 storey children’s hospital at the Mater is €450 ml.

    Oh, I get it, the €450 ml is just oil on the pan, the cost overruns come later


    Person, one of the gold diggers, digs big, big hole for himself and finds he can’t get out. Another man comes along and peers in. ‘My, mmmyyyy, that’s a mighty hole there’!

    ‘You need to cut an arm and a leg off yourself to get out of that. After all, it was your arms and legs got you into that hole’.

    Person cuts off arm and leg and dies. The other gold diggers frightened at the sight, up and left the land.

    Sometime later, the other man returns and sees what happened.

    He says: ‘Tooo bad!

    ‘No worries though, no time to lose, we’ll use the hole for something’ so he buys the hole in the ground for virtually nothing.’

    It was in dire need of some work to undo the work of the gold digger. But it was worth it. The other man struck gold.

    Some say the other man had been seen around before and saw the gold digger digging his big hole.

    But he said nothing, only smiled!

  48. coldblow

    Gene Kerrigan from Sunday’s Sindo:


    As I said before, he was calling all this a long time ago and was never seduced by the lets-be-positive Gadarene rush of the bubble years, so much so that he was beginning to look like a crank.

    Just for the record.

    • paulmcd

      Kerrigan is not seduced either by TURNING CORNERS, the new spin for A SOFT LANDING.

      The AIB drip feed has not really started.

      Lenihan is playing for time to bleed the taxpayer dry. His Budget speech will no doubt raise a few guffaws as he points to agencies talking up the Irish economy.

      Unless he and his cronies including the Greens face up to REALITY soon, they will reduce the nation to a shambles.

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