March 9, 2011

Keep an eye on your savings - you can be sure the State is

Posted in Irish Economy · 168 comments ·
Share 

In Latin America, just before a bankrupt state entirely runs out of money, it is traditional to try one last smashand- grab for the savings of the private citizen. We have seen this trend not just in South America’s recent financial history but down through the ages, where kings, tyrants and emperors expropriate the wealth of the nation to prop up their dysfunctional regimes.

Could it happen here? Could the savings of the private citizen be expropriated by the State to pay the last of the Croke Park promises? Or worse, could the remaining wealth of the private citizens be used to pay the odious debt of the banks? The answer is yes, and you have to be aware of this because this is often the way things end when a state goes bust.

Hopefully, the new Government will be wise to what was being hatched in the last desperate days of the previous regime. Just before Christmas, the State eyed up savings in our pension funds in one final effort to get its hands on your wealth.

There is a lot of money in Ireland’s private pensions. Currently, there is €48bn in defined benefit private pensions and €23.7bn in defined contribution schemes. This is a lot of bread and could finance a government for a number of years.

In addition, the pension funds need a financial fix and it would be in their interests if your cash were sequestered because it is no secret that many private pension funds in Ireland are suffering from funding difficulties. They have seen their original investments in bank shares wiped out and their position in the bonds of peripheral European countries and, of course, their exposure to Irish bonds have taken a hammering as the price of these bonds has fallen.

Like the Irish State, they are finding that their future liabilities might outweigh their ability to pay. These pension funds either need extra capital injections, or access to investments that return a risk-free high yield. Up to now, although not debarred from taking huge positions in Irish government debt, the more prudent pension fund managers have made a call on not putting all their eggs in that basket. But what might happen if that changed?

In December, Brian Lenihan introduced a scheme that seems, on the face of it, to provide just such an opportunity for the State to get more of our savings and for the pension funds to get higher yielding bonds to recapitalise their funds. So what is going on?

Consider the following. Irish sovereign debt is currently trading at very high yields, with our 10-year bonds at 9.4pc. If our pension funds could invest in that government debt at something close to that yield, it would go a long way towards covering the potential future losses of those funds. Under current legislation, pension funds can only invest in top-rated, low-yielding, sovereign debt — for example German bonds, yielding 3.2pc on 10 years. They have little access to the high-yielding stuff because it is more risky.

In order to overcome this, the scheme introduced by Brian Lenihan in December allows for the National Treasury Management Agency (NTMA) to issue new bonds that will be available for Irish pension funds.

The NTMA will allow Irish pension funds to buy new debt paying high interest.

On the face of it, this seems to be a very neat solution to what is likely to become a serious funding problem for Irish pension funds. It also has the added benefit of being a new source of funding for the State — rather than relying purely on the IMF and EU. It means that the State can start the process of grabbing people’s savings.

Just because something looks sensible on the face of it, doesn’t make it clever at all.

First, we have to look at a basic rule of investing. If the yield (interest rate) on an investment is high (and 9.4pc is very high for sovereign debt) then that price reflects the risk associated with that bond. Higher yield equals higher risk.

So pension funds will be exposing themselves to higher risk. Or rather, they will be exposing their members to higher risk. Remember these are some of the same lads who were buying Irish bank shares at the top of the market, so their judgment might not be the best.

Pension funds will also be further exposing Irish savers to the Irish State. Bad enough that the State is taxing us to pay for the banks but now it is taking our savings, through a sleight of hand with the pensions funds, to finance the banks too.

Remember it is your money. Private pension funds get their funding from people in employment putting their money in their pensions for the future. In an economic downturn, the number of people employed falls, therefore the number of people paying into the funds decreases (while the number of people withdrawing from the fund (pensioners) remains fairly constant. So, of course, now more than ever, the pension funds are attracted to something high-yielding, particularly if the State says, “Don’t worry, we will pay you in full.” But that’s just another promise.

When you think about it, the funding pressures on the pension funds are the same as the funding pressures on the State. Reduced economic activity in the State leads to reduced earnings for the Government, making buying Irish government bonds more risky. Can you now see how your savings might be put at risk by a scam which seems designed to help the State and the Irish pension fund industry?

THIS is yet another example of the “insiders” in Ireland saving their own skins and giving the bill and the attendant risk to the “outsiders” — the ordinary Joe.

A little birdie told me that the NTMA is considering offering a 30-year Irish government bond yielding 6.2pc in the near future. This might look attractive to the pension funds at first blush and it might appeal to the “green jersey” brigade — the insiders who in times of trouble call on us, the outsiders, to do our patriotic duty. Well, amigo, there is nothing patriotic about bailing out Anglo.

This initiative is yet another example of pyramid scheme thinking. At the top of this pyramid, the Irish State offers an Irish pension fund a huge yield. This helps the State cover its huge budget hole momentarily and makes the balance sheets of the pension funds look robust because the yield is so high. So at the top all looks fine. But at the bottom the entire scam is predicated on the economy — you and me — continuing to stuff our money into the base of the pyramid in taxes and now our savings. In this way, the State manages to tie up all the income and the wealth of the individual citizen in its scam.

When the likes of Argentina ran out of options, it swiped its people’s savings in various elaborate stitch-ups. We may be going down the same route. In Argentina this led a friend of mine to describe Argentinian compatriots as “great patriots and terrible citizens”. When they play football they are the most passionate supporters but ask them to keep their money at home and they will laugh, citing the last time patriotism was used to rob them. No gracias, amigo. Could it happen here? Cinnte!


  1. funmaisey

    Well that certainly is an eye opener and it would not surprise me if it happens. But David you dont say what are people to do who have pension schemes ? can they move them out of the country? contact their pension provider and give implicit instructions of where not to invest their pension ? that surely will not keep government hands of your savings ?

    • Certainly in defined contribution schemes you can have control, but in defined benefit schemes I believe the management is up to the fund manager.

    • Maeve Harrison-Barbet

      Funnymaisey,
      Yes. There is not much point in David pointing out all the pitfalls to us, in our hour of doom, unless he has some bright ideas for all those poor people who are now involved in putting their hard-earned cash into a pension fund that the Government ‘might’ purloin!
      I do love to read all David’s articles but I would really appreciate hardcore advice as to where one should put one’s money (whether this money is for future pensions or for old age pensioners who have already worked hard and saved) and be able to relax knowing that the fruits of their labours are safe.

      • paul77

        Maybe i’m wrong but I thought Europe guaranteed deposits up to a certain amount?, why has he not mentioned this?, i’m a bit confused as to why such a well informed person could miss such an important point, i’m sure only David knows I suppose….

  2. Gan Euro

    The smash and grab will surely extend to more than pensions.
    It would be interesting to see your take on Credit Union savings – a source of easy pickings. And what tactics can be employed to combat this theft.

  3. adamabyss

    subscribe.

  4. Annieke

    So how do we stop them raiding the pension schemes then? Presumably what you’re saying is that the fund managers have complete control and will go for the gamble and then we could lose everything again – through no fault of our own and with no way of doing anything about it?

  5. The Crier

    The Bell Ringer has spoken and no one now can deny that they have been WARNED.

    • Side Note :

      Sarkozys offices in Cannes were closed due to renovations maybe he has some great ideas again.

      En Confinance :

      This is their idea of Ireland :

      The advocacy of the Irish Exceptionalism has No Basis .

      EU integration is mostly entrenched and Irish Political and Banking radicalision is most intense.

      The Irish Electorate must now begin to assimilate .

      This means :

      Tell The Irish F**k Off ;

      The Irish Politicians and Bankers screwed you;

      Surrender NOW and change your crazy names and talk properly like we do ;

      Do what Napoleon says.

      • coldblow

        Or to borrow from Neil Young (substitute “Ireland” for “Alabama”):

        Alabama, you’ve got a weight on your shoulders that’s breaking your back
        Your cadillac has got a wheel in the ditch and a wheel on the track

        O-oh Alabama, can I see you and shake your hand?
        Make friends down in Alabama
        I’m from a new land
        I’ve come to see you
        See all this ruin
        What are you doing?
        Alabama, you’ve got the rest of the Union to help you along
        What’s going wrong?

    • Maeve Harrison-Barbet

      What is the point of being warned if one does not know how to counteract?

  6. FAiken

    They may also institute withdrawal restrictions. That happened in SA and Iceland. In Iceland, you couldn’t take more than $3,000 out of the country at a time.

    • Deco

      I think that this is going to happen. In fact for it to work, it could happen at EU level.

      I just wonder are there any Italians sending money to Switzerland, Norway, Poland, or investing it via relatives in the New World. I have it on good authority that the Italians are the one set of people who make the earnest efforts, to know if the people that they are loaning their money to, are capable of paying it back, or can be controlled so that they can be sure they will get it back.

      Therefore it would be interesting to see what the cross border flows in and out of the Italian banking system are currently. Forget the Germans. They know how to earn it, and they know how to save it. But then, they spoil all their great efforts, when they then recklessly lend it the idiots like the muppets heading up Ireland’s D4 banking fraternity. The Brits and the French are even more careless. The evidence is money that the French banking and Insurance sector invested in Greek bonds.

      If any of you have connections in the Italian banking system, then keep your ears to the grapevine, and pass on anything you might here.

    • Maeve Harrison-Barbet

      When going on holiday to Spain in 1961 the limit one was allowed to take out of the country (Ireland) was £50.

  7. MIPIM

    This is where I was today :

    http://www.mipim.com/en/mipim/

    I could find many Asset Management Companies but NOT NAMA .

  8. Deco

    I had a scan of the Program for Government. It mentions the Heineken Cup more times than AIB. In fact it never mentions AIB at all. I find this surprising, given that David Begg is a Director of the Central Bank of Ireland, and is behind the scenes telling the ILP what is going on. I did not check for mentions of Anglo. But anyway that is point the past of rescue now.

    No mention anywhere of the Genuises Ballsbridge BankCentre. Nothing on Pravda RTE – except for the advertising telling us to be with AIB. (Eh, I am not and do not with to be. Same applies to the other half of the Duopoly). Nothing from the Old Schitzo on D’Oliers Street (Irish Times) about AIB either. These were the two operations that were telling us all the great things about Anglo at the height of the boom. Economics is not the strong suite there either. I only hear about these days from the Sindo – and that is because longtime AIB critic Shane Ross is Business Editor. In fact I have not heard the phrase AIB or Allied Irish used once since last October in public, until today Shane Ross mentioned it again. And within five minutes Bernard Durkan(FG) (and others) was interrupting him.

    The establishment, both IBEC and ICTU are being silent on a very important issue here.

    The program for government does include a provision that copperfastens RTE to get more money out of the rest of us, with a provision to be made making those of us who have broadband, and no standard receiver to be made liable for the TV licence. And the TV licence will be renamed as something else. (cue – they are already doing favours for RTE. Just wonder what they expect in return….).

    This evening we hear that Portuguese bond yields are up, and demand for Portuguese bonds is dropping. The domino theory to prevent an Irish default, and thereby prevent a run on credict availability to

    The most significant news today is that Joan Burton will not occupy the almost Minister for Finance but not actually Minister for Finance position. It seemed like a dead cert at lunchtime. Then there was an adjounrnment at 17:15. Howlin (not as erratic or as clueless as Burton) got it instead. I smell the hidden hand of IBEC or even the banks already pleading with Kenny not to put people in prominent critical positions who are abrasive, daft and dangerous in front of an audience. Howlin, calmer, and more liable to think before he opens the mouth than Burton, seems like a safer option. It will be interesting to hear the “official” story on this appointment in the coming days. You will know it is “official” when it is the only explanation that will be provided from Pravda/RTE News. Howlin does not know what he is in for, because he will be the direct focus of bargaining between IBEC and ICTU.

    Unless, as David implies, that they both decide to use the state as a means of controlling the finances in the Irish banking system. It might well end up being the next piece of consensus thinking coming from the real powers in this economy. Basically, with the purpose of ensuring the survival of both.

    Thank God, we have Shane Ross in there to tell us if anything bad starts to happen.

    Shane Ross Abu !!

    • idij

      Deco, the job is Minister for Public (Expenditure and) Reform. I don’t think a grand conspiracy theory is particularly needed to say why he got it since Howlin’s name is the one on the Labour paper on Public Reform.

      I think what happened is that FG said, we’re getting finance. Labour had Public Reform already, and negotiated the finance bit into it because dividing up the loot as he sees fit gives reform minister real teeth. Noonan will still be telling Howlin how much the total has to be.

      • Deco

        Then I must ask why the media were consistely telling the population that Joan Burton would become a second minor minister for Finance.

        And of course, how you are so much better informed than they are. Maybe you should be doing their job, without having to get the obscene salaries that some people in RTE receive.

  9. ladygee2

    David, what about the people who have their money invested in Savings Bonds and other government savings schemes? Is their money being ‘eyed-up’, as well? If that’s the case what can those people do to hang on to their money? My wife and I have quite a substantial sum invested in Savings Bonds, which are due to mature in late November this year. Will it be safe enough to leave our money in them until then or should we be planning to get out, quickly, if we have to?

    • Lorcan

      @Ladygee2.
      Your money is not being ‘eyed-up’ it is already being used to fund the state. In fact, Savings Bonds already form part of our national debt, so by buying them you are actually lending money to the government.

      This page on the NTMA webste lists the instruments that make up the national debt, and Savings Bonds are there under note 3.

      http://ntma.ie/NationalDebt/compInstruments.php

    • Maeve Harrison-Barbet

      ladygee2, it is really about questions like yours that I think everyone living in Ireland with savings in EBS, Permanent TSB, Credit Unions etc., etc., would very much like to have a truthful answer. It has now got to the state that David has got everyone with more than a brass farthing to rub together worried and frightened as to where to put their money.

      Is under the mattress the safest spot? ?

  10. Deco

    The one thing that stands out a mile is that the role of the state in the economy will be shifted up another gear, in this program for government.

    The level of retractment by the state is minor enough. The ESB and Bord Gais are deemed “non-strategic” and will be sold. Personally, I reckon selling Bord Gais might not be a good idea financially, as you could use Bord Gais a bit like the way Putin uses Gazprom to elbow into any hydrocarbon find that the Western Majors come across in Russia. Except under EU rules that is not probably not possible here.

    It will be very interesting to hear what Constantin Gurdgiev has to say on this matter.

    • Maeve Harrison-Barbet

      Deco,
      Constantin Gurdgiev has an awful lot to say and it all makes sense to me.

      I, for one, would like to know his views on ‘everything’.

  11. Deco

    I think that if we look at the proposal of Lenihan as to invest state funds in buying state funds, when the market deems them high risk. It is a bit risky.

    It may be a better bet than buying US Treasuries or British gilts, and it may even be smarter than buying German bunds. It will only work if the rate eventually falls over the period of ten years, while those of the other possible investments see asset price declines (rising coupon rates).

    In other words it may work. But, for it to work there has to be a serious commitment to fixing the Irish state finances.

    Of course, to be on the safe side, people should save and be prepared just in case it doesn’t.

    But if Irish state bonds are yielding 10%, then it makes sense for the Irish state to buy those bonds, if the Irish state expects the yield to eventually go down.

    The Americans did this during the Eisenhower Administration, when they were buying back long term treasuries issued to finance their US buildup in WW2. Keynesian economics tells us this should have caused a recessionary effect. In fact, it reduced the cost of borrowing across the entire system, and thereby produced a short-term deflationary impact (which benmefitted wage-earners). It had a longer term impact of longer interest rates across the entire system.

    In other words, I am saying that it might be a good idea. If the ECB is loaning money to the Irish banking system at 2%, then it definitely does make sense.

    However, if state finances spiral out of control, then it will be a disastrous policy. Therefore we are in effect investing our money in such a manner as to enforce ourselves to be responsible, or otherwise we will be stuck with stark consequences.

  12. Posterity is recording;
    And so the Five point, sorry Four Point Plan or is that Three Point Plan commences!
    I have a Two Point – Sorry that’s a One Point at the back!
    Ah S**T what’s the point?

    Anyway can anyone tell me what type of mattress is best for my savings; Pocket sprung, Open sprung, Orthopaedic and Foam.

    • Deco

      To be honest, I reckon the campaign was filled with hard sell punchlines, daft promises, and efforts by the main campaigners to press emotional buttons in the voter population.

      The election was rammed through to happen as fast as possible, because there was a plethora of minor groupings, parties, organizations who were getting ready for an election, and needed time to prepare. Classic example being new vision.

      There definitely was not enough time to have a serious intelligent debate about economics. And the behaviour of some sectoral “vested interests” indicates that some people still don’t get it.

    • Maeve Harrison-Barbet

      Paul,

      Any of your mattresses will be best.

    • breltub

      I’d go with memory foam, at least when the money is gone you can look at the memory imprint of it and reminisce!

    • Paul :

      In France there are two seasons in a mattress one on each side with two different types of materials cotton for summer and wool for winter .

      Dont forget that the Germans counterfeited the Sterling Pound from Rags using Jews in the prison camps.

      Its Pot Luck.

  13. vincent

    Banksters Economy vs Mathematically Perfected Economy http://www.youtube.com/watch?v=gakViVaiA28

  14. miec

    It seems safer to stick your money under a mattress these days.

    • vincent

      Yea it will provide extra cushion for our backs, its only paper, check out any Euro note- Legal Tender is not written on it, there is no Date of Issue, there is no real Signature from anyone with a supposed position. Maybe its time more of us started concentrating on something of Real Value ie. the Land for our sustainance…

  15. Ireland is undergoing a lull at the moment thanks to the the opium being drip fed via our advertising sponsors and there is nothing like an election to divert people’s minds from the real issues. We have a nice guy in charge and have undergone a ‘revolution’ so everything is grand again. Delusional nonsense. This is becoming a war between speculators and savers

    There are grass roots movements springing up in the UK and the USA which are taking action to fight the bankers and the likes of Vodafone who dodged a 6 billion tax bill while pensioners are being expected to go without basic services

    People around the world are standing up and saying no but in Ireland there is still the mentality that everything will be fine. It is time Ireland woke up

    I always felt that pensions were a con and refused to to pay into them. If I had liquid cash right now I would buy some silver and help screw JP Morgan

    http://www.ukuncut.org.uk/blog/press-release-uk-uncut-protests-against-banks-across-uk-and-america

    • Deco

      Concerning the likes of Vodafone – companies in Britain who have funny means of arriving at their taxable income do get attention from the public.

      In particular “every little helps” gets a lot of attention from the fact that it pays something like 6% corporation tax. Hilariously enough, Terry Leahy the CEO of “every little helps” was appointed to the Business Commission for advising the UK government by Flash Gordon. The same Flash Gordon who liked to tell ordinary Brits about how he was going to come down hard on tax cheats.

      And here in Ireland we have rock stars who get promoted continuously by DJs in the state owned broadcasters, and later the same rock stars are more likely to be found talking to the Tulips in Amsterdam than paying taxes here.

      Concerning bank bailouts I am forever reminded of a the line taken by Dan McLaughlin, Chief “economist” at the now insolvent Bank of Ireland. Dan had no problem with dropping the going rate for a job, on the basis that somebody else might be able to do the job better for less money. In such circumstances the wage rates should be allowed to drop.

      However, Dan does not have to worry about such eventualities hitting him, given that he completely failed to give any senssible advice to the BoI. Dan is now effectively a state sector employer.

      These rogues simply do not understand capitalism. If they did, and if they were instructed that there would be no state intervention to coverup their ineptitude, then the probability is greater that they might have performed a more accurate analysis of the economy. As things stand, their will be no humiliation of Dan or Austin Hughes. There will be no lesson. Only a chance to make more momumental mistakes in future. This is the real legacy of the bailouts of “to big (or too well connected) to fail”.

  16. [...] of the banking cartels is in deep kimchi, they were set up to fail when laws were enacted to pickpocket fellow [...]

  17. “If the mega-rich who caused this crisis paid the same level of tax as you and me, we wouldn’t have a deficit”

    http://ukuncut.org.uk/blog/what-were-arguing-against-and-what-were-fighting-for

  18. Deco

    Well, this evening the news in the markets is Spain.

    Now, Spain has been really successful in terms of PR. A country with an unemployment rate that is nearly 21%. In addition there is overemployment in parts of the state system, where people are idle but getting wages. Spain has a serious labour market problem. And nobody is doing anything serious about it.

    The Spanish government has launched stimulus packages. And these stimulus packages are being funded by “off-balance-sheet” accounting methodologies, so that the money only appears as being spent in 2014. Basically, funny accounting is perfectly acceptable. And the ECB is happy with it also. Because the ECB is shoving currency into the Spanish economy. Presumably by that stage the Spanish PM will have “done a Bertie” (or should we say “done a Blair”) on the population.

    One result of this incomes crisis is many many empty houses. The banks are not foreclosing. And the banks are not declaring these non-paying properties as bad debts either. A case of having a property somewhere in the middle. And the authorities are completely complicit in this coverup.

    Brussels is shoving this out into the future, and completely bargepoling around the issue of the solvency of both the Spanish banking system, and the Spanish state.

    But don’t worry, you will not hear about this in the media until it is at the undeniable stage. We have a news blackout because the news is so bad, and because of those whose abilities it questions.

    Funny dealing is normal.
    http://www.marketwatch.com/story/santander-ceo-faces-three-month-ban-2011-03-10
    (this sort of funny business is always a precursor to bankers behaving badly – just look at what went on in this country).

    And a ratings downgrade.
    http://www.marketwatch.com/story/day-of-reckoning-arrives-for-spains-savings-banks-2011-03-10

    And last week, the Spanish state debt also go a ratings downgrade.

    This is how RTE covers the event.
    http://www.rte.ie/news/2011/0310/spain-business.html

    The problem according to Brussels is that the ratings agencies are being too harsh.

    Well, that is amazing. Just when the ratings agencies decide to stop going on with the usual happy clappy pretence of everything being well, and when they decide that they might veer in the direction of reality – and the Brussels gets annoyed.

    And RTE inform us that there is a problem with the ratings agencies.

    Actually there is a problem with the ratings agencies. They are not even taking account of half the problems that exist. And Brussels requests that this gets increased.

    Brussels will now regulate the ratings agencies.

    Brussels never gave a toss about the ratings agencies when they rated HypoVereinsbank, Anglo Irish, the Greek state, and the Spanish state at investment grade. But now that the ratings aencies start to do what they are supposed to do, to tell the truth, Brussels is spurred into regulating and constraining such behaviour.

  19. Youtube Zeitgeist Stage

    Why are the Irish people being conned into paying €430 Billion Euros worth of foreign banking debt?

    (according to a recent eye opening article from the non corporate American free press)

    http://bilderberg2011.com/bilderberg-group/bilderberg-2011-plans-for-more-economic-chaos/

    Strange how that’s almost the same value as our national oil and gas reserves! Could it be that Ireland was never broke in the first place and the greedy oil companies/Rothschild bankers who are all part of the Bilderberg group are just trying to steal our valuable natural resources under the pathetic disguise of a fraudulent unaffordable IMF loan so we can be conned into thinking we should hand over the oil and gas for free then buy it back from them @ €2 a litre at the pumps?

    See:

    New Irish Times Article Calls For The Immediate Nationalisation Of All €500 Billion Worth Of Irish Oil And Gas!

    http://www.irishtimes.com/newspaper/breaking/2011/0216/breaking49.html
    and

    http://www.facebook.com/notes/shell-to-sea-dublin/political-party-responses-on-renegotiating-the-oil-gas-deal/10150155532685120

    Turns out none of these “Irish” banks were even Irish owned before being nationalised as the Inter Alpha Banking Group is the largest British Rothschild owned banking empire in the world that currently controls 70% of the worlds banking system and our laughable puppet governments. All of us should take a closer look at Iceland who recently defaulted and told the mega rich bond holders to stick it in a place of limited sunshine along with the IMF and have since successfully exited the engineered recession in style!

    http://www.guardian.co.uk/business/2010/dec/07/iceland-exits-recession-third-quarter

    Everything you really need to know about the history of fractional reserve banking (legitimised fraud) and the true (foreign/Rothschild) ownership of the US Federal Reserve that “backs up” the US dollar is explained by:

    “The Money Masters” (full version) 3hrs

    http://www.youtube.com/watch?v=JXt1cayx0hs

    Here’s a 10 min video showing how the IMF intends to exploit the people of Ireland and grab our €420 Billion Euros worth of oil and gas!

    http://www.youtube.com/watch?v=0CofEbxtIxI&feature=watch_response

    then read:

    http://www.dublinshelltosea.com/content/420-billion-giveaway-ireland-natural-resources

    RTE even BACK UP all this info @ 10:35 secs on this video

    http://www.rte.ie/news/av/2011/0104/primetime.html

    More info @

    http://www.shelltosea.com

  20. paddyjones

    David is just rehashing an old story and doing a bit of scaremongering. Most pension funds have already moved their investments out of Ireland and investing in Irish Sovereign bonds would be a choice and the government could not “grab savings” . For these pension funds Ireland would be the last place they would invest as it is a “dog” of the investing world.
    But in regard to savings I would advise anybody to move their money out of Ireland or at least move to Rabobank in Dublin. Never invest in Irish stocks as these companies are run by idiots and gamblers, I cant think of one Irish company that is well run.
    My favourate markets are in Germany, US and Russia for what its worth.

    • Deco

      I can three Irish publicly quoted companies that are well run, and that have excellent track records in achieving growth and increasing value for customers and shareholders.

      Tullow Oil
      Ryanair
      Kerry Group.

      These are three oddballs or outsiders with respect to that flawed institution known as “the Irish concept of management”.

      What makes these special is that they do not share directors with any of the Irish banks or the Semi-states. Basically, do not pick a company that has a director appointed by an Irish bank. Because this is a “place man”, a golfing buddy of the bankers. The last thing you want is somebody at director level who is on the same wavelength as the clowns running the Irish banking system.

      Basically, the IBEC school of management is a disaster. It only works in the short term. Another reason to kick IBEC out of the process of running this economy that is called “social partnership”. (And don’t get me started about them muppets that are collectively termed “the beards”).

      • paddyjones

        These companies maybe Dublin listed but are not really Irish, maybe Kerry is.
        Having gotten stung by AIB shares in the past I will never again invest in Irish companies or even keep my savings here.
        Most Irish people live hand to mouth so they dont have savings , 500,000 dont even have bank accounts let alone access to the internet etc etc .
        Ireland is living off charity from Europe and the IMF ……very disheartning.

        • Deco

          I remember at the height of the boom, being told that US and UK institutions owned over 50% of AIB and BoI.

          Warren Buffet even made the uncharacteristic error of swallowing the hard sell nonsense from one of these funny farms, and buying 8% of them.

          Of course the banks themselves owned substantial amounts of shares in each other. And they owned shares in the rest of the ISEQ listing companies.

          As Shane Ross commented “the incestuous relationship between the boards of the major Irish public companies”.

          And these companies provided revenue via advertising to the media. So there was silence on the issue for years, until it became unignoreable.

    • Maeve Harrison-Barbet

      Paddyjones,

      Thanks for your advice. However, my money, small as it is, is not invested in Stocks or Shares but in fixed rate and term deposits, nothing more than 18 months, but no one seems able, apart from those that I’ve invested in, to tell me how secure/or not my hard earned money is or is not. Yes I have lost out on A.I.B, Shares. But, I would never have invested in shares anything I could not afford to lose! My advice to anyone would be the same – I am not a gambler.
      Therefore I do think all those ie Germany and France that have invested in Bonds should take the consequences of their gamble and not inpose their loss on the innocent Irish Nationals.

      • uchrisn

        Maeve your money is covered under the Irish government garantee for depositors which is in turn backed by the EU if the government can’t cover it.

        • Maeve Harrison-Barbet

          Thank you uchrisn,
          The fact that it is covered by the Irish Government is precisely what was worrying me.
          Now that you tell me that should our government default the EU will cough up I feel comforted.

  21. I sent e-mail queries to various institutions in Switzerland … asking if they would open deposit accounts for Irish citizens.
    Only 1 replied to say that they would only accept account openings from residents of neighbouring countries.

    Any ideas now?
    Perhaps someone else might try contact them too?
    Anyone here that can speak German has a great chance of obtaining information from these Swiss institutions …….

    No-replies:
    - UBS.com
    - ZKB.ch
    - credit-suisse.com/ch
    - bankcoop.ch/en

    Replied:
    - postfinance.ch/en/
    *PostFinance was recommended to me by a Swiss friend of my parents. They were quite disappointed to learn my outcome. The guess it’s something got to do with the Wikileaks guy (Assange) ………

    • Actually all of them were suggested by the Swiss friends … it’s just that PostFinance got good praise.

    • adamabyss

      If anyone wants a bank account in the Caribbean I can get it for you.

    • coldblow

      I posted this before, but this is part of an email I received in Feb last year from Rabo in response to a query I made about opening an account with them in Holland rather than Ireland:

      “You must be resident in the respective country to hold an account there. In the highly unlikely event that Ireland will be deemed bankrupt, RaboDirect customers’ money are safe as RaboDirect are part of the Dutch group Rabobank.”

      I like the ‘deemed bankrupt’ bit as we had long ago here deemed it so.

      As I also mentioned here before I joined in quite late in the Sept 08 bankrun, just three or four days before the Joe Duffy show kicked it off in earnest, seeing as I had my SSIA in Irish Nationwide and, Fingers being Fingers, I stood to lose about 2k over the 20k guaranteed limit. Innocent days. I moved it into the Post Office just in time but they made a mess up with the paperwork and I got a letter from them a week later saying that I had to present fresh documenation and go through it all over again. Maybe the lesson is you need to choose a well-run country for a bank run.

      By the way, does anyone still remember all that fuss about what to do with your maturing SSIAs back in 07/08? You know, the radio and the papers would do out lists of 100 different ways to spend the money.

      • irishminx

        @coldblow Yes I remember the fab days when my SSIA came through. I brought both my daughters to NYC for their 18th and 21st Birthdays, that almost 4 years ago now!!

        And yes, I remember the “lists of 100 different ways” you were encouraged to spend the SSIA!

        Happy bubble days huh!!

      • Deco

        Lucky are those that ignored all the media propaganda to goose up the economy and “support our advertising sponsors”.

        Better, to wait until the froth in the economy gets blown away, and the system goes into liquidation.

        Handy far anybody looking for residential property over the coming few years…could liberate people from being suckered into supermortgages.

        Looking back at the 100 ways to spend your SSIA, it looks obscene, reckless, wasteful and crass. Eddie Hobbs was telling people not to spend it but to invest it in precious metals and oil shares. Turns out in retrospect that he was right.

  22. irishminx

    And all we do is talk!

    • Yes but in talking about it we are educating one another and sharing new insights. The posters here are not generally subject to blind acceptance!
      I have spoken to people at work who I believe did take into account what I was saying when they recently cast their vote.
      Some of that influence and insight came from this site and more than enough came from your well posted links Minx!
      So thanks!

    • coldblow

      Hi Minx

      Who was it who said:

      “… because frankly the only thing that motivates me is being able to actively change something”?

      • coldblow

        To help jog the memory here’s the first bit:

        “Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don’t know how people who engage in that don’t commit suicide…”

    • irishminx

      @Paul……….Smiling,

      I agree I learn a lot from everyone who posts here and for that, I am grateful.

      However, there are times, I find the corruption and dishonesty of our Government and a lot of world Governments, so staggering, I feel overwhelmed and sad.

      I hadn’t realised until I read David’s post that Lenihan did this! This is theft on top of corruption & dishonesty!!

      @coldblow I don’t know who said it, so can you tell me, please :)

      • coldblow

        Ah Minx, this is possibly Bertosconi’s most famous quote (well that and the “Ye’re a waffler…”). It was directed at the likes of David here and Morgan Kelly who had been warning about the bubble.

        And I am indebted to Finfacts for the following quote as well, by Groucho Marx:

        “Those are my principles, and if you don’t like them… well I have others.”

        So Bert was not just a Socialist, but a Marxist too.

        • Annieke

          Bertosconi – very good I like that, I can think of a few more choice words but very good… ha ha

        • irishminx

          Yes, you’ve jogged my memory coldblow, thanks :)

          And I agree with Annieke “Bertosconi! is brilliant :))
          Thank you for your comments.

          @Colin I agree ignorance, willful or otherwise, is not wise!

          I think I’ve explained why I made the comment though.
          I’ll add, that sometimes the fact that I sit here frustrates me, when I’d love to be out there peacefully protesting in Kildare Street, along with every other Irish person!!

          And I’m cross that Enda paid lip service to decreasing his and other Dail members salaries!! Utter BS imo. He’s not mentioned or looked at their “Hello Money” aka Leaders Money!!

      • Annieke

        I agree with you irishminx, if you stop and think too much its all so overwhelming, so many people have lost so much already and now the thought of pensions being nicked as well …. but just what can we do about it. The talking does help us all to learn but we’re not experts and now it looks as if stuffing the bloody euros under the mattress is also a waste of time :(

        • Colin

          The alternative – wilfull ignorance – is not a good one.

        • vincent

          “but we’re not the experts” Hi Annieke, I believe we the people have as much expertise as any of the “experts” We just need to realize it more…

          • Maeve Harrison-Barbet

            Vincent,

            I think we have all realised it many years ago. What has come to pass is that everyone now needs to be an expert in everything. Those that are paid enormous sums of our money being the exceptions to this rule!

  23. I’m sorry Joan Burton, who, probably because of her long and staunch efforts to expose the Anglo banking scam, got shafted.

    The irony is those efforts probably got more votes in the election for LP than the rest of the party combined including Gilmore who got more and more hapless the longer the campaign went on.

    The shafting of his deputy leader exposes him as less a LP hack than a newly incorporated Fine Gael stentorian bought and paid for by FG, a remnant of his former self.

    • I think you’ll find that Joan is actually a real Socialist!
      They can’t have that sort of thing in the Irish Labour Party!!!!
      The only leftist influence remaining there is
      “What’s left for me???”

    • Deco

      My gut instinct is that IBEC simply did not want her in there. Howlin is calmer and more thoughtful about what he is going to say. La Burta is inclined to say stuff off the cuffe, and it can be a bit dangerous given the sensitive nature of the nations finances. She might have been too obvious with a pro-ICTU agenda. Instead the more diplomatic (and therefore less informative) Howlin was chosen.

      Concerning Anglo, she was four years too late in giving out about them. She should have spent the last ten years probing what was going on in Allied Irish.

      • Howlin, fair weather disinterested golden retriever who’ll do his masters bidding? Didn’t know he was a member of the LP until recently:)

        JB, accountancy, decade and more shadow on Finance, relatively tough on banks…willing to speak her mind…not one they want poring over evidence, don’t you think:)

        • Deco

          You might be right about Howlin. Time will tell. If he is the puppy, then Jack O’Connor is the master holding a firm grip at the other end of the leash.

          As Shane Ross, they rushed together a fudge and will be more determined to hang on to power than even the last coalition.

  24. michaelcoughlan

    Hi Suds,

    Guess Who?

    Oh deary me Suds. G-Sucks up to their goolies in doo doo again!

    http://www.economywatch.com/in-the-news/goldman-sachs-insider-trading-scandal-rajaratnam-faces-20-years-in-prison-if-guilty.07-03.htm

    My oh my oh my. Tut tut. Terrible shame…….

    I’SNT IT?

    No Suds not G-Sucks but the fact that another 40 year old mate of mine got on the plane for Australia on Wednesday after being out of work for over a year.

    What were you blathering on about Ireland not defaulting on its banking debt? Soon there won’t be anyone here to rape, tax, or pontificate to Suds!

    • Deco

      Concerning link 1, I have a suggestion concerning the economic council.

      Create it out of economists. Two from each of the universities. That gives you (TCD, UCD, DCU, NUIM, NUIG, UCC, UL) 14 economists. Maybe that is too many. Maybe ten would be enough. And then maybe they would disagree on everything.

      But the new government is right to have an economic council, to see if it produced postive and sensible recommendations.

      Joe Lee’s comment strategic planning is also relevant. Concerning infrastructure, we have lost the plot concerning scale, utility and economics. Classic example is two sports stadia three miles away with sight of each other. The specification of the M50 being equal to the Athlone by-pass is another big (expensive) disaster.

      An infrastructure review board (as suggested by Colm McCarthy) consisting of economists and engineers would give us intelligent decision making and eliminate the John O’donoghue factor.

  25. uchrisn

    In order to get a return on your money you have to take a risk. The higher the risk the higher the return. ‘Pension’ is not a magic word which means you can get a return without any risk. However stocks normally outperfom inflation and ordinanry savings over the long term, so it makes general sense to invest there or in property for your pension.
    The theory is that you can try to minimise the risk as much as possible.
    One way to do this is ‘hegding’ hence the emegenge of hedge funds. e.g. If the price of oil goes up then stocks normally go down so investing in both minimises risk.
    Also investing in stocks across 6 different sectors, e.g financial, I.T., Property is seen as statistically optimal.
    In my opinon its best to invest with the big guys, because you have the multiplier effect of all your fellow investors giving the director of the fund power and influence.
    For example PIMCO are large and influential players in the invesment market. They are basically so large that they can bully countries into paying back their bad investments, e.g. in Irish bonds.
    If you can’t beat them join them, right?
    Look clearly a mix of different invesments is best, bonds, term deposits, gold/Silver/ crude oil, Exchange traded funds, stocks from different sectors.
    My suggestion find a fund which deals in billions or trillions with those kind of ingredients.

    • uchrisn

      Also sustainable investing is growing now. Environmental Social Governmental rating agencies such as EIRIS provide ratings of companies on the factors mentioned above. There is genrally less risk in these companies as their corporate governace is good, they are well set to deal with future environmental laws or water charges, and they do some good in the community.
      However while the risk might be lower (Good for pensions) they might not make as high returns as companies just interested in profits at all costs.
      As usual the scandanavians are taking the lead here, forcing their top 1000 companies to make ESG reports like accounting reports every year.

    • Maeve Harrison-Barbet

      uchrisn,

      I am afraid we are not all as debonaire about our hard earned cash as you. And I know that not everyone is as old as I; that you are addressing those that are not yet at old age pension state in their lives. Most people I know do not want to take any risks as far as their money is concerned.

      However I do appreciate your words of wisdom.

      • uchrisn

        Hi Maeve, I was talking about long term investing of just a part of your income, maybe 10%.
        I understand your distrust of funds/stocks many of which have lost 50% due to the ‘crisis’.
        If you don’t want to take much risk then term deposit accounts could be your best bet.
        However I should point out that so much money is being printed now,( perhaps 3 trillion dollars in the last couple of years in the States)that it makes your cash worth less. Which is why people are investing in Gold/Commodities/Oil etc.
        If there is further financial problems in the eurozone as is expected then your euro notes especially will lose value. Unfortunatly the US dollar and sterling will both prob weaken too. So a Canadian Dollar, Norwegian Krona and Siss Franc term deposit account could be a good idea. In any case David Im sure could not give you investment advice as he could get into trouble if it goes south. Im just giving my opinion.

        • Maeve Harrison-Barbet

          uchrisn

          I appreciate your advice and, of course, I realise no one can categorically tell anyone what to do with their money without fear of blame should it all go wrong. Suggestions/ideas were what I had in mind and you have done just that – thank you.

        • Annieke

          Thanks uchrisn, cos I was only thinking of sterling or dollars so now to find a way to invest in Canada or Norway or I presume you mean Swiss francs. My main worry though is the pensions invested through BT pension schemes here and in the UK over which it feels like we have no control whatsoever.

          • uchrisn

            The heads of BTs pension scheme know better than us about investing and have better contacts. The question is are they getting the right incentives and being supervised properly e.g. by a group of shareholders. Perhaps that is something you have some control over. Even asking questions can show interest.
            You had the case of Goldman in the US who are in court over making bad investments for its clients and the bank profiting directly from those bad investments themselves. Corporate governance is key there and I believe you can have some input on that.
            As far as I know the BT pension scheme is very big, and so quite influential and also one of the leaders in promoting sustainable investing so it would seem ok compared to other schemes.
            As for the way to save in foreign currencies you can ask a bank in Ireland for a foreign currency account or set up an offshore savings account.

          • Annieke

            Thanks uchrisn, possibly good news about BT but I don’t think I’d put any money I didn’t have to through Irish banks

          • uchrisn

            Hi Annieke, if you have enough money you can open offshore savings accounts (in different currencies) with most major global banks. They may ask for a min of 10,000 euros or more.

          • Annieke

            yeah right…. ha ha ha … but seriously thanks – seems like its best to put a little bit here and a little bit there and a little bit somewhere else etc – to me. As was always the case I think and in all things.

  26. *****On the Rabodirect.ie thing *****

    I asked them a few questions … here’s one of them answered …

    Q2: If Ireland were to exit the euro (rapidly or otherwise) and revert to a new ‘irish national currency’: Would my deposits in Rabodirect.ie remain in EUR or would/could my deposits be converted into the new ‘irish national currency’ without my explicit consent?

    A2: This is a highly unlikely scenario and you should note that there have been no actual steps taken to remove any of the weaker countries from the Euro.

    If this situation did arise it would depend on the legislation that would be adopted by the Irish Government to resolve the issue.

    Although we are licensed by the Dutch Central Bank we must comply fully with the codes of practice of the Central Bank of Ireland and with all relevant EU and Irish law. So if new legislation is passed by the Government to affect all banks operating in Ireland, RaboDirect could potentially fall within the remit of that legislation.

    Again, this is speculation on the consequences of legislation which hasn’t even been proposed, so it is hard to predict its effect.

    Q3: Is Rabodirect.ie answerable to Irish law or Dutch law? [ie could the Irish government force EUR deposits be converted.]

    A3: RaboDirect, is licensed by the Dutch Central Bank in the Netherlands, and is regulated by the Central Bank of Ireland for conduct of business rules only, so we would have to abide by any changes in Irish Financial legislation or law.

    ********************
    So, in theory, your deposits are only as safe as state legislation provides for … the actual bank doesn’t matter a whole lot IF the state flicks the ‘I’m going to nuke ur savings’ switch ………..

    • Deco

      This would explain David’s observations about Italians shifting money into Switzerland.

      Watch that Italians – they will be the first to find out when the ship is taking on too much salty water….

  27. ex_pat_northerner

    You can always walk/drive across the border. The UK government is looking for money to pour in to its coffers. I don’t think its going to be any safer. Mervyn King has already started paving the way for another bank bailout here.. I believe some of the government schemes to provide liquidity (I don’t like that word as it implies the money will flow through the system when categorically its not happening) are ending. The banks also have to abide by Basel rulings and increase their capital. Meanwhile businesses are crying out for credit. Perhaps the queen should go to “cash for gold” to help the country out.
    What about Credit Unions. I don’t believe they’re leveraged ? Would that not be a safe enough place to put your money ? My understanding is that the union operates for its members not for shareholders, governmental or otherwise.

    • paulmcd

      Re: CREDIT UNIONS

      I have been seeking clarification on this issue, without satisfaction to date.

      I sent the following email, as a reply, to ILCU recently:

      I am still concerned as I do not trust the various guarantees, given the extremely compromised situation of the Irish financial system.

      Also, “some” is vague and could be interpreted as meaning “up to all” or from “1% to 99%”. I consider that the ILCU should issue a public statement on the matter stating exactly what percentage of collective funds are exposed to (Irish-banking) bonds.

      Brian Lenihan has been stating CLEARLY, perhaps incorrectly, that the Credit Union Movement is hugely exposed.

  28. irishminx

    BTW to ground myself, I think with the horrific disaster in Japan and elsewhere today, Irish economics & politics fade into in-significants. Real ordinary people’s lives will never be the same.

    My thoughts and prayers are with all effected.

    @John Allen, Any thing coming up with the “Super Moon phase” on the 19th of this month? I’m curious on your take.

    I’m not sure if you are interested in his link, I pass it on as information, make of it what you will!!

    http://www.jungleapocalypse.com/headline/giant-crack-opens-in-the-ground-in-pakistan/

    • Maeve Harrison-Barbet

      irishminx,

      I agree with you – how insignificant all our woes are sompared with those poor people who have lost their homes and all that entails. My thoughts are most certainly with them (as an atheist my prayers would not make any difference).

      The awful thing about all those dreadful disasters is it makes one smug in the sense that one feels lucky that one is not involved. It makes one more content with with one’s lot. Which seems to me most unfair.

  29. Gan Euro

    Replying to ex_pat_northerner: I too am interested in the credit unions. Even if they are not leveraged, C.U. deposits and savings are invested somewhere. How safe are those investments?
    They are guaranteed of course. But what is that guaranteee worth?
    And what of those vultures who are waiting and watching for their opportunity to grab the cash cow that the C.U. movement has become?
    They haven’t gone away you know!

    • irishminx

      From my own investigation on the Irish league of Credit Unions they are not safe either!

      The only positive thing I heard was use the biggest branch of Credit Union you could and deposit your saving there. I didn’t find this advise encouraging!!

      • Gan Euro

        Many people have their savings in the Credit Union because of their insurance (2 x savings, death benefit), etc.

        With the potential loss of those savings perhaps its a good time to die or switch those savings. But how and where are the big questions for the average citizen.

  30. Full MOON

    Today is the 7th Day B4 Full MOON and has already shown the Economic Factor to the Future of Japan and The Pacific and maybe The World.

    There is no doubt that the Earth Crusts have a planetary allignment since as early as last years Icelandic volcanic eruption and that a steady pattern has followed since then around the world.

    We have not seen the end of this and this trend pattern continues to become worse as time passes.

    For NOW the 7th Day is always Danger as we have seen every month since I begun writing on this blog a few years ago.

    Between now and next week end GO SLOW GO SLOW GO SLOW.

    • Darn it John!
      This weekend I had planned to jump over 20 Harley Davidsons in a Double Decker Bus!
      Should I postpone?

      • irishminx

        @John, thanks, I appreciate your knowledge.

        @Paul, you are so bold! :)

      • Paul – Just Go SLOW and take it off your gas .

        • Age of Aquarius ( Air ) – It is only a short few years since we began in this new phase to last over two thousand years and has it been a big change.It is only beginning and the speed of it will become enormous soon.Hold Thight.

      • Maeve Harrison-Barbet

        Paul Moriarty,

        Good luck with your jump! Lucky old you owning a double decker bus. Should you succeed in your jump you can always go and live in your bus!

        • Well thank you Maeve for being the only one to take an interest in todays jump!
          Just for you, and for no one else I am going to share my entry in today’s diary;

          Dear Diary,
          As I soared through the clear air with a steaming hot Bombardier between my legs I thought of Minx’s admonishing and John’s warning.
          Then as my rear bumper cleared the last Harley I suddenly had a thought;
          “Does my bum look big in this?”

          I know Maeve you’re wondering what this post has to do with an economic forum?
          - Ups and Downs!

          • Paul Moriarty –

            Welcome to Roller Coaster Moments to Full Moon you are describing the real experience very well and remember you are not faking it .

            Just ask yourself now – can you get off the pedestal ?

            And would going slowing bring you back to yourself again?

            This is Mighty Paul and you are not the only one.

            One last thing – Sunday is a day of rest .

  31. db

    I assume the pensions contributions have declined in recent times with unemployment & redundancy. even invested in low safe funds would the 71.7bn fund returns have been affected. If some of these funds were to be used through the government, with return of say 4%, to be invested into job creation. kinda benefits the pensions borad, government, tax payer (lower rate than imf), entrepreneur and unemployed. gov have the agencies like ida and experience to channel the job creation funds through. suppose it would depend on the success of the level of return from the invested funding to entreprenuers.

  32. Tull McAdoo

    In response to a comment or more to the point “a request” from Fergal back in January 15th 2009 with regard to what “one” might invest in to cover “one’s” posterior……..,
    I posted the following….
    o jim says:
    January 15, 2009 at 3:06 pm
    Aussie dollars simple as that. Now lets move onn ;;-]]]

    Back then the exchange rate was just under two Aussie dollars to the Euro……
    I expect that most of you have probably “realised” your gains at this point in time and I am sure that the more astute amongst you would have divested yourselves of “my native currency” back in December 2010 at the latest.
    However if any of you are still holding Aussie Dollars at this point , then I humbly suggest that you exchange same for Euro’s at your earliest convenience .
    P.S. first thing Monday morning should be fine….. chop chop chop….. times a wastin……

    • insider

      Hey Tull what’s the inside scoop on the AUD? I have moved the whole family from Australia for the warning signs have been bellowing for a while now. You have to know when a good thing has been a good thing and it’s time to get out.

      I promised Deco some time ago that Singapore is now the place to be over the next few years. The move has been executed and the grenades have been left behind although I’m still slightly exposed to AUD and the ASX.

      I must admit even for an insider this couldn’t have been better timing. The move nicely coincides with China cutting its growth targets in the last few weeks. Still I’m not convinced that the EURO is the place to go.

      • Tull McAdoo

        Back in 2002 Daniel Kahneman and his pal, the late Amos Tversky won a Nobel Prize for Economics for their theory which outlined how people face choices under conditions of uncertainty. Without getting bogged down in too much detail, the gist of what they proposed was that people have a tendency to get “anchored” to the price at which they bought an asset.
        While it is easy to understand how people have no reluctance to sell an asset when the price goes up, it is the reluctance to sell when the asset is falling that causes most concern. An example of this would have been when people in Ireland, held on to Bank shares right to the floor.
        My advice to sell Aussie Dollars was a reminder to those who may have become anchored in this currency. It provided a safe haven two years ago. It has since provided some nice gains, but I feel that there is very little to be gained from holding it now.
        As for your decision to leave Australia to live in Singapore, well I might refer to another Nobel Prize winner who had some interesting things to say back in 1978. Herbert Simon won the prize for Economics for his theory which outlined how it was not necessarily rational for individuals to go to great lengths, searching for the perfect answer, as the search in terms of time, money and other resources; including family contentment should be considered in terms of what he called “bounded rationality”. Simon argued that individuals could save a lot of time and effort by making decisions that are “good enough” rather than perfect.

        • Annieke

          I agree Tull, getting your head around ‘good enough’ is brilliant, really relieves the stress for us perfectionists – in all things not just money.

          • insider

            “Good enough” might be sufficient for most people but I do not subscribe. This is generally an Irish psyche moment when one says “sure, it’ll be grand”. Indeed, satisficing may be what epitomises the Irish the most.

            I agree it takes a brave man to sell at the top but an even braver man to short. GSLs come in handy too to remove the emotion :-)

            Now I must say that the move to Singapore was not purely financially motivated and certainly not bounded by many constraints. It’s great to add another chapter to the book and great opportunities should not be ignored. Singapore may not be Sydney but it’s an interesting place to be and in some ways it has increased our quality of life. If you have young kids then it can seriously make your life easier. In theory it may not sound perfect but in practice it has worked out extremely well.

            Love the analysis.

  33. Meanwhile Joan Burton has rolled over for the LP hoping to take controversy out of her demotion.

    Might be appropriate requiem here:)

    http://www.youtube.com/watch?v=GCCS5fixC70

    We’ll have to wait until end of March to see the extent of Enda’s rolling over his position on CT.

    Be assured it will be as ignominious.

    All of which rather than solve the crisis in Ireland, should ensure it will get worse.

    Looks like our new crew will dig our hole deeper!
    The question is, how fast can they dig?

    Vassal state, here we go:)

  34. Gege Le Beau

    We have foxes and wolves, Democrats and Republicans, Fianna Fail and Fine Gael, Conservatives and Labour…they both want to devour you……..

    We have homeless, record numbers go to the Capuchin centre for meals and food parcels, we have astonishing suicide rates which are always under-reported, we have a huge issue on the horizon regarding youth and alcoholism (companies promoting these products should be banned from sponsoring sporting events, advertising in cinemas or before 9pm on television).

    We have political campaign rhetoric and political policy – they are world aparts.

    We have banks too big to fail while people lose their jobs, their homes, their savings, aren’t the people too important to leave them ‘fail’?

    €150 in public money has gone into a endless pit of a financial services system, public money, while these same institutions increase mortgage interest rates.

    We have 455,000 unemployed, and many more underemployed.

    We have 1000 emigrating per week.

    We have 100,000 in mortgage arrears.

    We have had thousands who’ve had their gas and electricity cut off.

    We have politicians who just ‘retired’ with multi-millionaire euro pensions.

    We haven’t a single banker jailed.

    We have an astonishing concentration of wealth, political decision-making in the hands of the few who care little for the societal wide consequences of their decisions.

    Hospital wards are closing while record numbers of people are on trollies. Can we demand a return of the ‘performance bonuses’ for such failure?

    We have had children die in the care of the State.

    The Catholic church still largely controls the education system.

    We have in fact a Failed State which proprotionately, has just undergone the greatest financial theft in world history.

    We have an EU with both boots on our neck because the elties want their money back.

    We have one business party masquerading as three political parties who quite frankly don’t give a shit because if they did they would not have signed off on a Taoiseach making 200,000, a Tanaiste making 183,000 and Ministers on 173,000, brought in water charges until at the very least the appalling infrastructure was repaired. If they actually gave a shit house repossessions would stop overnight and no bank would be allowed to increase mortgage interest rates nor would any citizen in difficulty have their electricity or gas cut off, some form of mediation would be introduced for if we can find so much money for worthless bankers we can sure as hell find a few bob (a tiny percentage of overall spend) so people can have light in their living rooms and be able to cook a decent meal on the stove.

    Worth checking out, might enlighten
    http://www.informationclearinghouse.info/article27665.htm

    • Gege Le Beau

      No edit function on posts – meant to say: €150 billion (as reported by RTE-PRAVDA) in public money has gone into a endless pit of a financial services system, public money, while these same institutions increase mortgage interest rates.

      • http://www.bankpoll.net/phpBB3/

        You can open a new topic, or Minx could open one eg MinxLinks to add her links on different topics and have them in single location, not enough time to do more work on it from me.

        Recovering from a dose of the flu, about to watch the video above, hope it cheers me up:)

    • coldblow

      Hi Gege

      While I agree with your post (and suspect the accuracy of your figures) I don’t agree that Catholic control of education is necessarily a bad thing although in theory it could be. Catholic schools possibly provide the least ideological form of education these days. I’m speaking here not in my capacity as a Catholic but as a pioneer of the non-non-denominational movement (no huntsmen, hunt saboteurs or vegetarians welcome). We (or rather just me so far) prefer to take a progressive holistic approach…

      • adamabyss

        I’m a non-believer, have to say though – Catholic education did me no harm when I was a kid, neither primary nor secondary school. The standard was high too in comparision to what I’ve seen around the world (with the possible exception of when I lived in Hungary – although they’ve got different problems). Now I’m in Maynooth and enjoying it. You can tell the Catholics to leave you alone (even when you are a kid) and they will. Of course the subject of clerical abuse is outside of that (personal) observation.

        Good post though Gege, meant to say yesterday.

        • Maeve Harrison-Barbet

          Did anyone watch ‘Brendan Smyth – Betrayal of Trust’ on BBC 1 both last night and tonight?

          If the leaders of the Catholic Church in Ireland were so devious can anyone blame all the good Catholic Politicians following in their footsteps ? !

          • adamabyss

            Yeah, I watched it Maeve; it was well put together and obviously a horrific story.

          • coldblow

            Didn’t Dick Spring use the case as an excuse for pulling the plug on the coalition govt? Proving that while they may not all be committed Catholics the LP still understand the value of public piety.

            Reminds me that in 1986 (according to Crotty) the LP actually called off their conference in Cork City Hall or wherever (a favourable vote of the members here could have overturned the party’s pro-Single European Act policy), not because they didn’t want their European policy challenged, of course, but because (wait for it) they wished to show solidarity with the cleaners in the hall who were on strike and didn’t have time to find an alternative venue.

  35. Gege Le Beau

    Maybe David McWilliams can write about “the efficient market hypothesis”.

    Yet to see neoliberalism mentioned in an article, I welcome a correction if wrong.

    • Deco

      Neoliberalism is a philosophy that takes merges some aspects of socialism and some aspects of capitalism.

      Socialism for the rich, and capitalism for the poor.

      Benefits for the well connected. Taxes for the less well connected. It follows Marxist theory concerning the use of political power to control the flow of wealth. And then it adapts capitalism as a means for ensuring competition in sectors that are not connected to the state system.

      • Gege Le Beau

        I wouldn’t put it quite like that Deco, does a disservice to genuine socialists/social democrats.

        Chomsky has an article here on it

        “Neoliberalism is the defining political economic paradigm of our time – it refers to the policies and processes whereby a relative handful of private interests are permitted to control as much as possible of social life in order to maximize their personal profit. Associated initially with Reagan and Thatcher, neoliberalism has for the past two decades been the dominant global political economic trend adopted by political parties of the center, much of the traditional left, and the right. These parties and the policies they enact represent the immediate interests of extremely wealthy investors and less than one thousand large corporations.

        Aside from some academics and members of the business community, the term neoliberalism is largely unknown and unused by the public at large, especially in the United States. There, to the contrary, neoliberal initiatives are characterized as free market policies that encourage private enterprise and consumer choice, reward personal responsibility and entrepreneurial initiative, and undermine the dead hand of the incompetent, bureaucratic, and parasitic government, which can never do good (even when well intentioned, which it rarely is). A generation of corporate-financed public relations efforts has given these terms and ideas a near-sacred aura. As a result, these phrases and the claims they imply rarely require empirical defense, and are invoked to rationalize anything from lowering taxes on the wealthy and scrapping environmental regulations to dismantling public education and social welfare programs. Indeed, any activity that might interfere with corporate domination of society is automatically suspect because it would impede the workings of the free market, which is advanced as the only rational, fair, and democratic allocator of goods and services. At their most eloquent, proponents of neoliberalism sound as if they are doing poor people, the environment, and everybody else a tremendous service as they enact policies on behalf of the wealthy few.”
        http://www.chomsky.info/onchomsky/19990401.htm

        • Deco

          I included the link below just to give an indication of how the argument in the US (and indeed elsewhere) is nuanced in favour of free trade (outsourcing), rescuing the bank system (swamping the banks with money to make up for their stupidity), and other initiatives.

          On the surface it is described as one thing. Beneath it functions as something else.

          ‘Seek the Truth and ye shall find’ is an old phrase that probably describes the work that we must do to be free of this propaganda.

        • StephenKenny

          http://en.wikipedia.org/wiki/Neoliberalism

          It has become a political ideology that ignores the fundamental social and economic tenants of capitalism, while using it’s language. In much the same way as it became axiomatic that any country with ‘Democratic’ in it’s name was anything but. East Germany was the ‘German Democratic Republic’, and was neither democratic, nor a republic, but was German.

          All political ideologies, even in the very rare cases that they actually make any sense, very quickly degenerate into this sort of system. The reason that the US enacted the second amendment to their constitution was to enable their citizens to instill fear into their government. Governments should fear the governed, not the other way round.

          • Maeve Harrison-Barbet

            StephenKenny,

            Ideologies are/could be the bane of humans?

            To instil fear into a government by the governed is ideal – well I think so anyway.

  36. paulmcd

    Where savings capacity is concerned, I am a public servant on c. 85,000 per annum gross and allowing for cutbacks I am currently down 1,000 per month NET compared with two years ago.

    NO FREE LUNCH! – I heard a Eurocrat say recently in relation to AUSTERITY measures. I don’t mind paying my fair share as a taxpayer, buy PLEASE, Mr/Ms Eurocrat, why should I, as an individual, have to pay €1000 for one BIG MAC (McNamara) + €1000 for another BIG MAC (McInerney) + countless thousands for the small fries.

    • paddythepig

      The tax windfall from excessive bank lending provided the cash for benchmarking and for over-recruitment into the public service, albeit temporary cash.

      Without it, depending on your circumstances, you would be either not employed in the public service at all, or you would be earning a lot less.

      • paulmcd

        Agree with this observation; but we need a strategy to bring about a whole-scale deleveraging of price levels/earnings throughout the economy to accompany a massive programme of graduated debt forgiveness, depending on people’s circumstances, to match the massive level of defaults which the Government MUST eventually enforce on banking and other debts.

        Perhaps the only realistic way to achieve the above is to exit the Euro.

        I am not one who “partied” during the boom. I was someone who looked at sums in relative terms and, a decade ago, I was watching with horror as the price of a 4-bed home, which I wished to own, spiralled upwards at a faster rate than the 3-bed semi which I already possessed.

        In the end, to buy a house with an extra bedroom, I was obliged in 2004 to sell my 3-bed at a multiple of 2 times my gross salary while being obliged to pay 5 times that salary to own a 4-bed.

        I said to the auctioneer at the time that the price spiral was madness and that I expected prices to fall 50% from the levels then prevailing (ie, in 2004). I STILL EXPECT THIS TO HAPPEN – HOUSE PRICES WILL CONTINUE TO FALL, AND WILL PROBABLY “OVER-CORRECT” WHILE RETURNING TOWARDS A HISTORICAL NORM OF C. 2.5 TIMES AVERAGE GROSS EARNINGS.

        • Annieke

          I agree that prices will probably fall eventually but see Tull’s comment above people are very reluctant to sell for less than they paid or even for less than they think they ‘should’ get thats why there’s so many empty houses sitting around.

  37. Deco

    Gege, you might see parallels in Ireland concerning the features in the following documentary.

    http://freedocumentaries.org/int.php?filmID=87

    Some stories make it into media coverage.
    And others do not. Because the people are to be directed.

    “Support our advertising sponsors”.

    • For extra comport, hope you made sure the TV LCD your family bought has a pc connector port you can connect to from your laptop, that way you can watch it on TV:)

      • Gege Le Beau

        Soon the ‘TV’ will be a thing of the past, it will all go virtual with internet by-passing news channels in particular, consumer will be calling what he/she watches, could also be a blow against advertisments….I barely watch the TV these days, far more info on the net, and thanks for link Deco, useful.

        • Yes, also it should be born in mind there is ongoing pressure on democratisation of news channels, so points made in documentary above, such as 10 years ago there were up to 50 approx major news channels globally, that this number has reduced to 6 or 7, are no longer valid. This is because of increased internet access among the masses. So we have people on the streets of Benghazi with mobile internet access able to bypass propaganda and provide real balance. This has been a major feature in the emerging democracies across the Arab world and it should be celebrated.

          But propaganda as on Pravda rte is endemic, so we had Pat Cox rattle on about negotiating a deal with Europe on news at one today without either he or interviewer even once raise the real question, which should be, are we prepared to leave the EZ if the deal is not satisfactory to our economic interests as a member of the EU?

        • Dilly

          I got rid of cable tv. I have everything hooked up to the internet, in order to watch what I want when I want. When I visit friends, I find it very hard to watch the tv. It is hard to get used to mind numbing adverts, soap operas and singing competitions when you no longer have that crap coming into your own home.

          • Gege Le Beau

            Very good points.

            Dilly – could not agree more, don’t want the pollution nor have I the patience, Al Jazeera rarely shows adverts and its news coerage is exceptional.

            Online using facebook and twitter is way more informative, I have better quality information than the news networks in a lot of cases. An Egytian scholar said there was no political space in the society, in the media or body politic for discussion, change so a new space, the virtual space, was created, organised and brought to bear on the old space with dramatic consequences, most things are online, I rarely watch TV these days, while movies or documentaries can be purchased if necessary at very low prices on several sites, with free delivery, better than Amazon.

            Its actually quite funny to compare what passes as news in RTE-PRAVDA and the Irish Times, some of the articles in the latter are appalling. The Times mentioned that the death toll in Japan ‘could surpass 10,000′ when it is widely reported that there are 30,000 reported missing, presumed dead, I expect the initial figure could be between 50-100,000 if not more.

            Online is thankfully full of critical comment, some great stuff.

  38. RADIATION WARNING

    Will it reach Ireland ?

    Winter Months this is the direction :

    http://britishcolumbiachemtrailalert.wordpress.com/2011/03/12/nuke-alert-japanese-nuclear-meltdown-prevailing-winds-of-radiation/

    Summer Months it travells North to Korea and Russia .

  39. Japans Buyout Funds :

    Japan will now not have any funds to purchase any EU Bonds as previously expected thus weakening the efforts of the EU to strengten the periferal members.

    • Just heard the extraordinary dignified Mr Keiichi Hayashi Japanese ambassador to the UK take pride in the spirit of the Japanese people, no riots, no looting, forbearance and resolve to react the best way they can to help each other.

      And the rest of the world coming to help? Rescue teams from the UK are on the move, but generally they appear left by themselves…

      Its a bit undignified to worry whether they can afford to buy EU bonds or worry if their radiation problem might reach here….

      • cbweb – that mindset is irresponsible to yourself and your country.

        Time is knowledge and must be heeded otherwise it is gone and so is everything else.

        • John, why do Irish people have this delusionary notion that there is any effort whatsoever to strengthen the peripherals; other than for the mainplayers to gain a little more from their penury by way of extracting them extra lending if they can, or protecting themselves from any damage their penury may cause?

          We havn’t had a core meltdown over there yet. But the risk is there. If we do, might be worth paying attention to wind direction at that point.

          Also, Japan is one of the most heavily indebted nations in the world, so how they goin to pay for it? They deserve all our support.

  40. paulmcd

    I have noted people’s concerns about safeguarding their savings.

    I do not believe that there is a single currency anywhere, at the moment, in which to safeguard your savings.

    The standing of the Swiss Franc is compromised by virtue of the fact that so many big investors have already fled to this traditional safe haven. What if they all decide to exit simultaneously? – not beyond the bounds of possibility as there is huge exposure of the Swiss Franc to mortgages loans taken out in certain countries in Eastern Europe.

    I would say: KEEP IT SIMPLE, INVEST IN VICE

    I do not mean becoming an investor in the OUR LADY OF LOURDES SUPER-CASINO in North Tipperary.

    There are large multinationals with high-yielding (3.5% to 5%) stocks, earning most of their income in DIVERSIFIED CURRENCIES abroad and growing strongly in the emerging markets. (Think tobacco stocks, like Philip Morris International, or drinks/beverages, like Diageo.)

    If I were to put all my eggs into one basket,it would probably be Schlumberger (SLB) in the oil services sector, though its yield is low.

    • re “OUR LADY OF LOURDES SUPER-CASINO” would that be themed with moving statues and pyramids of dosh released when She appears? Fr Ted franchise:)

      Tobacco stocks, you must be crazy! Oil is dodgy because of lots of false supply propaganda and global recession. Arab world can pump faster to make up for Libya. World food stocks are now bet on the futures markets and can fluctuate wildly.

      Fiat currencies worldwide are under pressure because of global debt pileup and meltdown fears.

  41. uchrisn

    “THE PROCESS OF EUROPEAN
    INTEGRATION AND THE FUTURE OF
    EUROPE” by Joe Stigiltz is a good read. He says that the ECB is run by techocrats with no democratic election and that they are actually overly representing the financial markets due to boards being made up of people from that area. So they are far more concerned with keeping down inflation (good for financial markets) than increasing employment. He points out that Latin Americans have copped this and have much more neutral people on boards of their central banks.
    He states the importance of monetary policy to the economy, the number one election issue and suggests that governments can get the blame for something they or the people have no control over.
    My question is, how representitive is the ECB of the people of Europe?

  42. uchrisn

    If I was Inda I’d be asking Jeane Claude that little poser.

  43. coldblow

    I heard on RTE radio this morning that one economist has predicted the cost of the Japanese disaster at €120bn. After a quick mental tot it seems that the pro capita cost of the Irish financial earthquake and sunami will be about 100 times higher. No wonder we’ve heard little of late from Seanie, Fingers and the rest of the crew. They have put the terrifying raw destructive power of nature into the shade. This time it was different all right.

You must log in to post a comment.
× Hide comments