March 30, 2011

Examinership, not bailout, the way forward for banks

Posted in Banks · 205 comments ·
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Contrary to the spin, we do have a choice. In fact, it is probably the most important choice for years

Do you feel like you are sleepwalking into yet another banking disaster? Tomorrow’s stress tests are likely to result in you and me lumbered with another €20bn bill for Ireland’s dysfunctional banks. Why? Will this make a jot of difference to the economy? Is there a cheaper way of doing this? Why do we have to pay anyway? The banks are bust and yes, they can be made solvent by throwing billions of our euros at them, but to what end? To fatten them up for sale so someone else — some investor — gets all the upside?

Remember NAMA was supposed to “get credit flowing”? Now we know it is a fee fest for the same auctioneers, accountants and lawyers whose fingerprints were all over the collapse of the economy, the property market and the banks in the first place. They got paid enormous sums in the boom and now they are getting paid enormous sums in the bust and they are being paid with your money. NAMA hasn’t gone away you know!

Maybe just consider one thought on NAMA: the very auctioneers who overvalued Irish property in the boom and were instrumental in feeding the frenzy have been rewarded for their part in this mess by being made valuers for the very same property that they once overvalued. How does that make you feel?

Now let’s consider the banks. The stress tests will tell us just how bankrupt the banks are now, after five previous injections of cash. So the stress tests give us a chance to decide how are we, in this country of ours, going to deal with the banks. Contrary to the spin, we do have a choice. In fact, the choice is probably the most important policy choice faced by any government for many years.

We are being told from all quarters — by the vested interests who insecure commentators refer to as “serious people” — that we have no choice but to put more money into the banks. This is cobblers and overlooks legislation, which is actually in place to deal with bankruptcy.

There is a different way of doing things and there is a normal business way of dealing with bankrupt banks which doesn’t endanger deposits and keeps the banks’ doors open for business without lumbering you and your children with a huge bill which was never yours to pay.

But as usual the ordinary Joe — who is paying the bill — is being so bombarded by half-fictions, quack economics and financial propaganda by the “insiders” — who will benefit from his largesse — that he is totally confused and doesn’t know which way is up at this stage.

Let’s clarify things. There are three ways of dealing with bankrupt banks. There is the present Government/ establishment’s way; there is the nuclear option of receivership and there is the logical, business-like procedure which is called “examination”.

The present option means that no bondholders will be touched or, if they are, their pain will be modest and you, the taxpayer pays. Even the new language is duplicitous. ‘Burn the bondholder’ was ridiculous when the bondholders burned themselves by their stupid investments. But now we have a new expression ‘burden-sharing’. Think about the meaning of ‘burden-sharing’; I will share a burden with someone if we are both culpable; that sounds fair. But why should I share the burden of a loan that was never mine and was always his? Every cent of citizens’ money given to a bondholder is a subsidy from the poor to the rich. This is corporate welfare for the banking classes — the very people who regularly rail against social welfare for the working classes. It is grossly unfair and financially incoherent.

The second option or nuclear option is receivership. This is where the losses are so big and you conclude that the bank has no future so you close the bank down. Here is where we get into the ranking of who gets paid and in what order in a receivership.

In a receivership, the receiver comes in and looks at a balance sheet and assesses the difference between assets and liabilities. He then tries to sell the assets and pay back the creditors. The creditors form a queue and will be paid in the following order.

The first to be paid in a bank closure are secured and trust creditors. Secured creditors might be other banks that have lent money to the bank in cash. And trust creditors are depositors who deposited money into the bank based on trust.

After secured and trust creditors, if there is more money left, the next in line are super-preferred creditors. These are the employees and the Revenue Commissioners.

If there is any money left after the secured, the trust and the super-preferred creditors are paid, the unsecured creditors will get paid. These are the bondholders and the trade creditors. We know who the bondholders are and the trade creditors are people like the IT supplier or the landlord and the like. Finally, if there is anything left after this, it goes to the lowliest creditor — the shareholder.

The receivership approach is deployed if you think that there is no future for the company. As such, it is the nuclear option. But we know that for some of the banks, there is a future. So why not go down the examinership route?

Examinership is in Irish company law. It is already there. The aim of an examinership is to keep the company open. It is designed to restructure all the debts, clean the company up, find a new buyer and start again. The main aspect of an examinership is that historical debts are not paid in full. The line is drawn in the sand at historical debts. The company undertakes to pay all its overheads and trade through the difficulties.

The historical debts are treated like a receivership. The new owners decide who gets what and how much. The same priorities apply. So the secured creditors and trust creditors get most. In the case of a bank, deposits could be guaranteed by the Government. After that a haircut is applied to all the other creditors. It could be 40 cents in the euro or 10 cents depending what the stress tests reveal.

This is exactly what Obama did with General Motors. In the US examinership is called “Chapter 11″. There are various different ways of sweetening the pill for the creditors who get whacked. For example, you could give them 20 cents on the euro and then a ‘kicker’ later if the banks’ profits improve in a few years. So you tie payment to future profits. You could involve debt-for-equity swaps in this too.

There is always a buyer.

Ask any liquidator whether they have ever failed to get a buyer after a proper examinership. Who wouldn’t buy an Irish bank if it were cleaned up? There will be any number of suitors both from Europe and further afield, and the taxpayer doesn’t have to pay a cent more. The depositors would be safe and one part of the great Irish financial crisis would be solved.

This is the way out. It is the business solution to a business problem and it works all over the world.

Tomorrow’s stress tests only reinforce the logic of examinership for the Irish banks. Let’s hope the new Government is open to persuasion.


    • Malcolm McClure

      The clever spell checker in this programme has made Tim ‘Time’ and cobweb ‘cobweb’.
      Apologies to both.

    • NO HOPE

      I think it`s time for an examination on why the new coalition partners lied to us in the pre-election bullshit. They said no money would go into the banks without burden sharing. Gilmore and Kenny are going the same way as the previous Gov. What a waste of time they all are. Let`s all leave while there are still airlines servicing the routes outta this dump….

  1. Gege Le Beau

    The bailout part II could be north of €33 billion, the societal consequences unknowable.
    http://www.bbc.co.uk/blogs/thereporters/robertpeston/2011/03/the_unbelievable_truth_about_i.html

    Some form of debt write down/structured default has to be the way forward, cut a deal and lets move on because this is like a slow death for a failing State with Lowry sideshow in the background while Sarkozy and Merkel are in deep political trouble and focused on re-election, while Rome burned…………

  2. shtove

    I really would NOT recommend anything Obama does. Just another shill for the banks, an enemy of the rule of law.

    David, I just listened to your February interview with Bill Black. Thanks for bringing his views to bear on the Irish situation.

    Black’s views are clear – investigate and prosecute. There is no way out of this for Ireland until the banks are killed stone dead.

    • Gege Le Beau

      Black is an intelligent and most of all, decent man from what I have seen. As is Elizabeth Warren, despite it all, there are more than an honourable few who are attempting to hold the line, whether these wise financial prophets will be listened to is another story, remember the parable of the rich man and the rope.

      • shtove

        Don’t need the parable.

        Simple as right and wrong. Warren is admirable, but she’s stuck in the same shit and has no hope of reforming things.

        The people have to figure out the difference between right and wrong, and make that difference. Not much hope when you see people like Lowrey exposed as a crook, and yet returned to public office over and over again.

        In 2006 a rich man in Ireland was some boyo leveraged up the kazoo with real estate debt. A poor woman depended on state payouts: working tax credits and child benefit and child tax credits and housing benefit and … blah blah.

        All blaggers, two sides of the same coin.

        What about the people who actually work? Those who create wealth and improve our lives? They take it at both ends, conveniently converted into a dozen taxes and duties and commissions, all wasted on thieves like the bankers.

        Enough.

        The state is the enemy. The banks are its allies. Could they have fucked things up more? No. Will they get the chance to do it again? Yes.

        Kill them now.

    • shtove

      And here it is – the end of Ireland:

      “Friday April 01 2011

      THE Government has been ordered by the EU/IMF to impose a property tax on all homeowners within a year.”

      Taxes only compound the problem. Poverty ahead.

      http://www.independent.ie/national-news/property-tax-on-way-within-year-2603975.html

  3. daveceannt

    This seems to make sense but, in the case of IL&P what of the tracker mortgage holders? If the bank goes into examinership can the new owners force tracker mortgage holders to go variable? If not who’d want to buy? Particularly after they have sold off the profitable bit of the company: http://bit.ly/fUdd3n

    • idij

      Whoever buys the business excluding the debts doesn’t have to lend the money again, and so don’t have to borrow it again. The mortgage repayments represent a revenue stream. Someone will buy that stream for X euros. X euros then goes to pay off some percentage of the debts of IL&P, and the rest are just bad debts and tough luck for whoever.

  4. EoinCahalan

    Yes, valuers “over valued” property in the past but everyone knows that the market is set at what a willing buyer and seller agree on. Valuers couldn’t turn around and say “actually I don’t think you can afford this” to the buyer and “you’re ripping him off to the seller”, most of them did their jobs by the book. So of course they will be the ones to revalue the NAMA properties. Who else would?!

    Other then this I agree the Banks should be examined but, the stark reality it that if they were examined from the start most of them would have been closed down rather than bailed out.

    The purpose of examination is not to keep the business open, but to assess whether or not it has the capability to stay open.

    • Colin

      A lot of vendors say they can’t sell their property because “there’s no market”. This is a lie. There is a market, but the vendor doesn’t wish to keep reducing his asking price to meet this lower real level. The translation to “there’s no market” is “I’ll not budge until I find a sucker out there who’ll pay me what I think the property is worth”. Remember that next time you hear someone say there is no market.

      • Deco

        +1.

        There is a market. It is just that the sellers cannot accept the consequences of the prices that the buyers are prepared to pay. The “property industry” is in denial.

    • uchrisn

      Property prices were fixed high in a collusion involving developers and the banks. They were clearly not at market prices. Banks did not ask the developers to repay their loans on scedule ( repaying by lowering the price and selling properties like should happen in market law). They knew falling prices would affect them. Real Estate professionals were caught up in this. You had developers buying up other developers properties to keep the price up.
      The only evidence you need is around 200 thousand empty properties in a country as small as Ireland with prices which were so ridicously high.How can that be a correct market price?
      As far as I am concerned personally it was this collusion which caused many issues we are facing now, like the failure of the banks. I have been recommending tougher laws on housing ownership such as in Italy, Singapore etc. For example in Shangai they brounght in legislation to stop developers hoarding development lands and fixing prices.

      • uchrisn

        By the way the US investors/Hegde funds are not that dull. They were the first ones out of the Irish banks in 2007 when they simply flew over to Ireland paid an an Estate Agent to be honest, who told them the real story i.e. there are 200,000 empty properties, priced ridiculously high and nothing selling. They promtly sold their Irish bank shares. As usual the people were the last to know. Remember the government actually bought in legislation to make sure no clear information on housing prices, or sales was available. They should have been doing the opposite.

        • uchrisn

          We can’t leave the property owing Irish people or the older generation pension holders based on property out of this one either. Imagine for a second the government brought in legisaltion against collusion, were honest and straightforward with everyone, and brought in legislation such as a high tax on 2nd propeties.
          House values would have fallen. The above mentioned people would have been quite unhappy and thrown out the goverment in 2007.

          • uchrisn

            Imagine if they did it today? Thats why Fine Gael are in power, Irish property owners and older generation pension holders are still desperatly trying to hold the values in their investments. NAMA is a great example. The majority of voters in Ireland, represented by finefail/finegael policies, bought up all the empty properties and the banks with taxpayers money, making sure they control property prices. Selling property at its fair market value is just not an option for the majority of Irish people. Anyway as long as people keep thinking of their own short term interests the country will be very slow to recover.

          • uchrisn

            The positive of fair market residential and commercial property prices and rents (av mortages around 3.5 times av yearly income) – People of all nationalities come back to or stay in Ireland. They work,start businesses, save and pay taxes.
            The penny might drop after a another couple of years of less workers, less business, less savings in the banks and less taxs to spend on services.

      • Colin

        uchrisn,

        “Property prices were fixed high in a collusion involving developers and the banks. They were clearly not at market prices.”

        I disagree. They clearly were at market prices, albeit a corrupted rigged market, thanks to a steady stream of lemmings walking into estate agents demanding the opportunity to own their own house. If the lemmings had bothered reading David’s books and newspaper articles, then property prices would NOT have risen as they did.

        In summary, there’s always a market, even within the bubble years. The market however is not always honest and fair, so if you really want to buy, the first thing you need to do is find out if the market is fair or fixed.

        • uchrisn

          I meant to say fair prices or fair market prices. However due to collusion the property market in Ireland was/is operating as a monopoly with very high mark-ups. With 200,000 empty properties back then the demand was obviously not as important as the ability to fix prices. Very few were buying from 2007 but the prices were still fixed high. I don’t blame people for buying properties. Shelter is a basic human need, so either buy, rent or emigrate.

  5. Colin

    “Let’s hope the new Government is open to persuasion.”

    Its time we bent down on our knees and started praying for that.

  6. Julia

    Good article as always. And always holding out hope. I’m just watching a not very swashbuckling version of Robin Hood with Russel Crowe. Gladiator it ain’t. But as usual the rich are getting richer and the poor are getting poorer. Robin Hood is running around stealing from the rich to feed the poor.

    And in this country the black market will be alive and thriving if things don’t improve or if people don’t think things will improve. I don’t mean the illegal cigarette smugglers, I mean ordinary people. Who can blame them. I really resent paying taxes to a government who will just pass the money on to rich foreign banks and billionaires while friends of mine lose their jobs and houses, can’t get hospital appointments, can’t get the education they deserve for their children and are still, in this day and age, rearing their children for the boat or plane.

    It’s time we stood up to these absentee landlords. But we’ve all been saying this for three years. And David has been saying it for a lot longer. Who’s listening?

  7. Could somebody offer an educated guess on the following for me please;

    1. Does such an “Examinership” automatically represent a complete rebuke of the entire EU/IMF bailout package?

    2. What would be the likely bond-market reaction to such a move?

    • donal jackson

      In answer to your first question No.
      Your second one is difficult for a number of different reasons. 1. the EU and the Euro is under pressure to say the least.2 maybe after the results of the stress test is made known we will have a better idea of where we actually are going because, in my opinion, we will experience these tests scenarios in reality very shortly. When all this happens the bond market will know what it has been surmising all along. We are on a very hard journey now.Jean Claude Trichet must take the hammer for not doing his job. We will be demoted if the EU survives.

    • donal jackson

      The riskier the investment the more the interest rate because of the lack of collateral. if you want money for nothing it doesn’t exist for us. The EU/IMF money is cheap on the whole at the moment but the amount we have guaranteed on is too much.We could get it cheaper if the EU guaranteed us instead of borrowing @ 3% from the bond market and giving it to us @ 5.9% this is the same bond market that is currently quoting 10% for us. The bond market looks at reality not fiction and the people in it know their business.

      • Save the People

        @Donal Jackson. To say the EU IMF loan is cheap is quite simply absurd. China offers rates ranging between 0.2% and 3.6% to countries throughout the world. They offered to provide finance to Portugal in December. They are actively seeking to use their $2 trillion foreign exchange fund to invest in Europe.

        I have been advocating seeking assistance from China for quite some time now. David McWilliams has touched briefly upon this option while debating on Prime Time a few weeks ago.

        I simply do not understand why David has pulled back from this option which is the most likely to succeed.

        • paddythepig

          What interest rate are they charging Portugal?

          • donal jackson

            They were down graded again today so I’m not too sure right now, however, we should not worry about other countries and what they’re paying.We have a major problem and the ECB and Mr Trichet are not interested in really helping us without concessions from us.We’ll be lucky if we end up in tier 2 of the EU.

          • paddythepig

            For all the 1 Trillion in US treasuries that China bought, China paid the market rate.

            For all EU sovereign debt that they choose to buy, they will pay the market rate.

            They are not a benign creditor.

            They will only pay a preferential rate where there is a sweetener for them ; either preferential access to a country’s commodities such as oil, with further guarantees for usage of Chinese labour, and so on.

            They have been free to show an interest in Irish debt at the market rate, but have shown no such interest.

          • Save the People

            In response to your comments, firstly Portugal, have not yet recieved finance from China, although there is an agreement between the two countries. The mere threat of accepting finance from Chinsa saw an increase in interest in bonds from E.U nations, clearly to prevent the finance from China.

            Secondly the almost $2 trillion the U.S owes China is at a rate of 0% interest and is based on trade agreements.

            Thirdly, we have gas resources worth 11 trillion euros off our coast. I have been advocating the nationalisation of our gas fields for some time, as you are aware. It is scandalous that our government has stood by the law changes made by Ray Burke and Bertie Ahern, which effectively gives away this huge natural resource. Ireland should not be in economic difficulty. It is our crooked politicians and peoples failure to speak out against the raping of our nation that are allowing this hostile takeover of our country. It must be stopped.

        • donal jackson

          It’s cheap compared to what we are being offered on the bond market at the moment.

    • @Paul,

      RE 2: I fondly remember Lenihan cautioning us re 2. But now the spreads are over 10%, the question is moot, we just cannot make the spreads worse.

      RE 1: EU/IMF bailout package is under review at all times by Chopra and those applying it.

      We simply bring in a team trained to carry this out and do it. We then inform whoever needs to know.

  8. Maybe you did have some crook valuers over there, David, but as a director of a valuation firm in Australia, that’s doesn’t seem to be the nub of the issue to me.

    The market value in a bubble still remains the market value, but here in Oz, at least, a mortgage valuation is also required to comment on the likelihood of the market price declining (a) within a year and (b) within 3 years.

    But our bank lenders, wanting to do a deal at any cost, usually ignored these additional comments, considering them to be remote and speculative – almost like guesswork or soothsaying, when they were usually much more than that. So they didn’t ajust their loan-to-value ratios.

    Therefore, banks did certainly fail the risk management test. So, I agree with you, why should any consideration be given at all to bailing banks out for rotten lending practices?

  9. If your company wants to take the Examinership route the Directors decide .

    If your Irish Bank or Banks should professionally have to be going the examinership route the Directors ‘do not’ discuss it and whisperpass the blame to the Regulator who whisperpasses it to the DOF who whisperpass it to the Minister …who whisperpasses it to the Taoiseach …who whisperpasses it to the EU …who declare they were never told .

    No Irish Bank will discuss this strategy because …’there would be a run on Deposits ‘.You cannot expect the Bord of Directors of an Irish Bank to do the decent thing .They have never fought in a war battle or drawn blood but they have plundered the Nation dry and without a conscience and filled their own personal coffers .Gadafy would be a minor compared to the ruthlessness and treason of Irish Bank Management.

  10. wills

    David.

    What we got here is *Disaster capitalism*.

    The free market system for the moment is on pause.

    Corporatism rules.

    So we get told TSB, the latest shock, will be fine and its normal now for taxpayers to be used to bail banks toxic debts out to keep the private banks in business.

    Its got to be some type of cultural phenomena underway, we are all living through.

  11. wills

    David.

    All the insiders have to do now is just announce the sky is falling in and bobs your Uncle they can use the sky falling in to switcheroo private debts onto the public purse.

  12. wills

    David.

    Technology and paper and no moral scruples.

    Bubble making software.

    And now government has been absorbed into bubble making pyramid scams.

    Business and government and finance and insurance hand in hand addicted to the get rich quick fix of bubble scams.

  13. wills

    Humankind has hit the bricks on new frontiers.

    No new frontier is there to exploit.

    The jig is up.

    And western society is merely speeding up to force it to be there.

    Oh sh1t !!

  14. CitizenWhy

    The orders from Brussels and Berlin are, “Put more money in the banks.” The orders will be followed.

    As Churchill once said of Americans, but now certainly applies to the Irish political class, they naively believe that “if something does not work, then more of it will work.”

  15. CitizenWhy

    Any Irish bank in the future should be regulated by Ireland, but with the regulatory agency being a branch of the bank regulators in Sweden. Sweden let its bank managers, incompetent or corrupt, failures in either case, suffer the consequences of its actions. Ireland needs strangers to its cozy political culture overseeing its banks. Otherwise favors will be done, with clever little narratives to make the favors appear to be either absolutely necessary or admirably in the best interests of the people.

  16. Noble View

    Leaders use the experience from the top of their local hill to view the vast expanse of their domaine in olden times .It was an experience to feel and seek wisdom of the ways in life at the time and to make better decisions to show the the best directions that the goodness of the local toil and hard labour should take for the welfare of all the local families.

    Today , ruteless deceptive toxic and treasonable Irish Bank Management look behind themselves and wear many hats and move lips without words ,cast glancing eyes in coded nuances among themselves , hide from the people they represent , build walls of silence around themselves to stop the truth from reaching their tables of power ,employ agents of deception to reach the people they represent , and other endless death treatening conspiracies to kill off the the truth of their ways.

    And still they are allowed to spoil themselves with the fruit of the labour and hard work of the valleys and steal the storehouse and run away without a blemish or a wink of an eye.

    And we call ourselves A REPUBLIC !

  17. Prism of this Forum

    We are still in Denial what is happening .We have invoked our senses that nothing more can be said as we have said it all before .We feel that we are only repeating what went on and will be the same that will continue .We have numbed our senses believing we cannot be shocked anymore and that the circus is over .

    You have not started yet .You have not seen anything yet .You have not known any pain yet .A new moment will arrive soon and your Denial will be raised to a new level to be quashed and yourselves obliterated in lost hope.That moment …..this moment ……is NOW.

  18. Mike Aynesley of Anglo dropped the canard on Morning Ireland that ‘no one could have predicted the changes in the property market over the past few years’

    Bullshit, I’m no genius, but I along with many others called the craziness of NAMA’s ‘Long Term Estimated Value LTEV’

    We knew property asset values would collapse and government NAMA and taxpayer injection of funds into the banks would be a disastrous socialisation of the banking sector, taxpayers would be raided to pay for bank losses exposing them to a black hole.

    For at least the last decade our economy was controlled and led by a rentier class in Irish society who gained control of the banks and government.

    They still have that control. Their present scam operated since the crash of 2008 is to protect their rentier assets from loss by raiding the taxpayer purse.

    The money poured into the banks today and to Nama that can’t wait to get their teeth into.

    Brilliant and timely article from DmcW.

    Examinership and receivership should have been the Irish government policy response from the outset.

    Unfortunately, through a mixture of incompetence and craven service of the demands of the ECB led by Trichet, whose recovery policy for Ireland is to blood suck the Irish economy to pay down the losses of German bondholders, we are where we are.

    Historically in world economic history I believe the Irish government response to our crash in 2008 will stand up there as the worst and most expensive in history.

    As we spiral downward with deflation over the remainder of this year, which can only exponentially get worse under present government policies of bailout for the banks, the figures of bank losses today should be revised upward, to factor in deflation and further drops in property values.

    Today we see another move towards the detroitification of property values and the Irish economy so that whatever is applied today will have precisely the opposite effect intended.

    Expect to hear more lies today and more gombeen statements next year as more losses announced, ‘No one could have predicted the changes in the property market over the past few years’……

    • miec

      “Mike Aynesley of Anglo dropped the canard on Morning Ireland that ‘no one could have predicted the changes in the property market over the past few years’”

      I agree this is an utter bullshit statement, I am not an economist but the evidence was there for everyone to see, houses were priced way out for the average working person even for those who could get a 100% mortgage, it was ludicrous that a person on €25,000 or so was given a mortgage for a house valued at a quarter of a million euros, it just did not add up. From 2007 one could see all the empty properties building up, holding on to their extoriant prices but everyone still believed in the spiel and spin. One of the lessons everyone should realise is believe in what you see, not what you hear.

      David, another excellent article, like others I pray the government goes with the examination option but I fear they won’t, I believe they will go with the first option and the ordinary Irish people will be crippled financially for years. It is pretty depressing.

    • Deco

      Well, Mike Annesley certainly couldn’t have. He was working in a bank the other side of the world.

      But if you talked to the tradesmen, a lot of them, especially those who are based in regions where the ghost estates are now showing up, were convinced it would collapse eventually.

      If Mike Annesley did not think it would end, then he is not fit to run any bank.

  19. Gege Le Beau

    All in one day in Ireland

    Stress tests to reveal extra funds needed by Irish banks
    http://www.irishtimes.com/newspaper/breaking/2011/0331/breaking5.html

    Anglo reports 2010 loss of €17.7bn
    http://www.irishtimes.com/newspaper/breaking/2011/0331/breaking6.html

    Lowry to face Dáil censure motion
    http://www.irishtimes.com/newspaper/breaking/2011/0331/breaking1.html

    • Deco

      Just wondering is Lowry liable to a civil suit on behalf of the Irish taxpayers ?

      • Gege Le Beau

        He could be, but this is all yet to play out, if the Guards and DPP see there is sufficient evidence for criminal trial then this goes to phase II, one way or another this has to be sorted, either the guy is innocent or he is not, he is entitled to presumption of innocence before the courts. Let it go to trial and judge and jury finish this thing because it has gone on long enough.

  20. Gege Le Beau

    Hard to see things improving when potential talent like this is allowed walk out the dooor to the U$A.

    What was that about the innovative?
    http://www.irishtimes.com/newspaper/frontpage/2011/0331/1224293434440.html

    • Deco

      Unbelievable.

      The Brussels friendly establishment in thi country wants to strap us onto a lump of lead called bondholder debt. And at the same time wants to get rid of any hope of moving this country forward, by ignoring people who understand business.

      Never, ever assume that the business elite of this country understand anything about business, or that what is referred to as management understands management.

      But they do understand the idea of keeping up a good show – that much is certain. We have had a “show” for two decades, and perhaps even longer. Classic example being the way the wagons were circled around Denis the Menace after the Tribunal. The media focus is on Lowry. I am suspicious that significant parts of the media are afraid of someday needing Denis the Menace for a meal ticket.

      • Gege Le Beau

        I think that story is a PERFECT illustration, not that anyone needed, universities couldn’t hold them, didn’t get Irish sponsorship, walked out the door to the U$A!

        Knowledge economy alright, just enough knowledge to find out where the airport is…..

        DAA – Dubai, Australia, Anywhere but here.

        • Deco

          I think you are right. They don’t get the knowledge economy.

          • Gege Le Beau

            Trinuty College, IDA, Enterprise Ireland, could none of them have intervened to keep those Irish lads in Ireland?

            Madness, giving away the game with all the focus on ‘exports’, we need an indigenous industry that can produce for itself, and also like those two, be there to back people with ideas, some of which won’t come off, some of which will, such is the game, the powers that be were well able to take a €200 billion risk with the economy, these two were looking for $2 million which they got from the Americans.

            Facebook is worth about $50 billion, Twitter about $10 billion and rising………who knows what will appear on the virutal horizon next.

        • Nothing compared to the daily loss of Irish PHd’s, engineers, doctors, nurses, postgrad/undergrads leaving by the boatload, education paid for at Irish taxpayers expense.

          Where’s the debate referendum on whether we should continue to bail out the banks?

          Today will be a disgraceful day that will reveal the true face of our treasonous ‘so-called’ FG/ILP opposition!!

          • Deco

            The problem with hardworking brains in this country is that the threat they pose to the more laid back corrupt brains who have garnered the power.

            Politics (including especially cronyism) has trumped intelligence. Nothing new there. It has been happening for decades.

  21. SK

    David – Your idea (as usual) seems logical. One q – I understand the banks are borrowing on a daily basis from the ECB to keep cash in the ATM’s – in an examinership situation – would the ECB continue to fund the banks? Where would we get the cash from to meet banks day to day requirements?

  22. Deco

    {
    The banks are bust and yes, they can be made solvent by throwing billions of our euros at them, but to what end? To fatten them up for sale so someone else – some investor – gets all the upside?
    }

    It is getting more absurd by the day.

    And of course we CANNOT have a firesale of assets. Why not ? I mean if you increase capital gains tax, you get half the money back eventually anyway. And it might help drive down the cost base, and make the economy more competitive.

    I am also reminded of the comment that the US economist/bank insolvency expert Bill Black stated on David’s radio show a few months bac, about the policy framework that has been pursued sinc ethe begining of this crisis.

  23. Deco

    Anglo Banglo. Is leatsa E.

    http://www.breakingnews.ie/business/anglo-irish-bank-announces-another-record-loss-499310.html

    17.7 Billion in the red. The bank of Drumm and Drummer is on a roll. Beating more records. How much is that when divided by the number of people who work in the export sector. (Multinationals, SMEs, Farmers, Hotel workers, Fisheries, Mining etc…). A lot of money to be pulled in from abroad so that it can be sent back to the Anglo Bondholders.

    Alright, time for a break. Going for a round of golf in Druid’s Glen with Seanie Fitz, Fintan Drury, a bank economist, and Biffo. But we are certain that we shall not talk about the future of Anglo Banglo.

    • Deco

      What on all earth does the EBS need 1 Billion Euro for ?

      Can we not just declare the EBS insolvent and put an end to this farce ? Pay the depositors, and put an end to it.

      • Tim

        Deco Why not revoke the banking licenses of these insolvent private sector companies? Since they are no longer banks, the guarantee no longer will apply; these private companies can then manage their own debt, or default, whichever they choose. Just as their profits were not ours in the past, their debts should not be ours stretching into the future.

        • Deco

          Correct. I think you have a very salient and relevant point.

          They have failed as banks.
          And, they are no longer acting as banks.
          They are acting as sinkholes, taking the liquid stuff out of the basin.
          Move the deposits to a part of the economy that is generating economic activity, and which is hopefully driving the economy.
          Guarantee the deposits because they represent people’s toil and industry.

      • paddythepig

        Pay the depositors with what?

        • Colin

          I think what Deco means is give the depositors their deposits back. The banks still have deposits, its in the safes, ATM machines and Foreign Exchange reserves.

  24. Deco

    Keynseian economic stimulus planning in the PRC.

    http://www.businessinsider.com/china-ghost-city-documentary-2011-3

    Anybody who thinks the Chinese will buy empty real estate in Athlone might want to consider why they Chinese are using all the real estate under their own noses.

    Wills – it sounds kind of familiar – yet another Ponzi scheme.

    The construction is continuing. Keynesian expansion. Ditherer would be impressed.

  25. matthewmacgabhann

    David,
    Were you not the one who advocated the bank guarantee and a bad bank solution?

  26. SLICKMICK

    Today’s Mail says the mean wage in Anglo is 100k ! FG/Lab will be as despised as FF in 4 months.Anglo has announced the biggest loss, relative to it’s size in corporate history.RBS is in better shape !

  27. SLICKMICK

    http://www.independent.ie
    Shameless Brendan Griffin.

    • coldblow

      He has given up a lot of his salary but hired his wife and cousin as sec. and constituency worker. I don’t understand. I assume the wife is the lady in the white spacesuit in the picture? All right, she’s been his sec. for 10 years now, but the cousin? Maybe he had the best of intentions, but then his family “got” at him? You know, like the person who trips in the carpark and laughs it off, but comes back with a claim after he’s taken advice from his mates?

  28. malone

    Nice Article David

    There is a slight problem however

    In this article you advocate that some banks have a future and that people would be queueing up to buy some of these banks and that examinership is the way forward.

    These are also the same banks who robbed us blind
    and bet with our money.

    In an article some time ago you poined out in detail the dangers of Irish banks being owned by foreign corporations.

    It seems that you are changing tack somehow and saying things from both sides of the coin. Whose side are you on ? Is the establishment paying you to say these things ?

    It also seems that there is a lot simpler solution and you mentioned it in part as it being a nuclear solution

    The banks are insolvent. The Banks are a company
    and as you described when when a company goes bust, The liquadator is called in and the shop is closed down. Any assets then are sold to pay whoever

    That is what should happen to the Banks . It is not rocket science , or is not as involved as understanding the Heisenberg Uncertainty Principle in Physics

    The goverment then sets up new nationalised banks
    which are completely state owned where they control the ” production” of money and the whole system takes off again

    QED

    • And the type of bank we need at this point having been burned so badly by the private banks is Bank of North Dakota.

      http://motherjones.com/mojo/2009/03/how-nation%E2%80%99s-only-state-owned-bank-became-envy-wall-street

      Note today in the target area of the intersecting vertical and horizontal hairlines of the asset stripping bailout money grab is the €17 bn of the National Pension Reserve Fund.

      We could use that to set up our own BND.

      Now, if you or I were dealing with a money lender, first thing we’d ensure before paying out a penny is that we have agreement on the final tally.

      Don’t matter how this is done, whether by a combination of insurance against further loss, or demand that assets be liquidated, but have them written down, or bundled into a spv, or sold off in a CDO, instead our GOMs are exposing us taxpayers to further losses on top of already unacceptable losses.

      If changes occur in the future to markdowns, then doh, we’ll do the figures again. But we’ve done this 5 times so far, figures bouncing losses from €3 bn to € 30 bn in the case of Anglo alone.

      Trichet targeting the NPRF wants to make sure we don’t make a run for it in the future.

      Its nothing short of treason to pay over any further bank losses to bondholders.

      If that money gets handed over on the half pretence our bank problems are solved today, this is nothing short of a national scandal. This money will disappear into the black hole of the banks.

      And I didn’t mention the fact we can’t afford to pay over that money without crippling the economy. So, should we pour more billions into a black hole that a) no guarantee it will be enough b) we know for certain because already we are in the grip of inflation likely to worsen will break the economy?

      Or should we write down losses with a Bill Black process of examinership/receivership. We also know the underlying economy is sound and ready to move if the banks can be dealt with with.

      Let’s apply a bit of logic:)

      http://searchcio-midmarket.techtarget.com/definition/Ockhams-razor

      “Ockham’s insistence on the use of parsimony (we might call it minimalism) in thought resulted in some later writer’s invention of the term, Ockham’s razor. Among his statements (translated from his Latin) are: “Plurality is not to be assumed without necessity” and “What can be done with fewer [assumptions] is done in vain with more.” One consequence of this methodology is the idea that the simplest or most obvious explanation of several competing ones is the one that should be preferred until it is proven wrong.”

      Its obvious to me we need to use Ockham’s razor and go for simplest of the two unpalatable solutions: namely, by a process of examinership/receivership bring down the banks that are causing the problem. This will have the bonus of a quick solution.

      The alternative is we throw billions we don’t have onto a bonfire in the gamble markets will believe paddy paper doesn’t burn away when thrown onto the fire:)

      • malone

        cdweb , I like the article about the bank of North Dakota

        I do think though that bringing down the bad banks
        and leaving the good ones there is a bad idea.

        I think the same rot that is in the sector now would just be left to fester still in the management of the good banks and the cronies would find a way back

        I think that all the retail banks in this mess should be shut completely with all staff banned from
        working in any other bank.

        That way you will get rid of the rot completely.
        There a lot of pleople out there whould could be employed with financial qualifications and new ideas and a fresh way of thinking

        You make a completely new start and with a lot tighter regulations and this time the goverment like in Canada has control of the money it prints
        not like at the minute where the banks can produce all the money they want.

      • uchrisn

        Whatever happened to Fine Gaels ‘good bank’ idea.

  29. should be …grip of deflation

  30. Tim

    Folks, ECB likely to raise int rates in Apr after EZ Mar inflation of 2.6%, what int rates will be assumd in stress tests today?

    wp.me/pNlCf-1dy

    (via Namawinelake)

  31. Tim

    Also, don’t forget Lorcan’s blog site will be broadcasting the press conference and figures/updates/etc for stress tests here:

    http://blog.cornerturned.com/2011/03/30/bailouts-last-stand/

  32. coldblow

    What do I know, but I still have the gut feeling that once a critical mass of Irish depositors have offshored their dosh then the case for default will be articulated with increasing urgency and become irresistible. By ‘critical mass’ I mean not too many, but just enough to tip the balance (that’s what democracy is after all). Hell, why stop at default, why not throw Euro exit into the bargain, just to prove to our European partners that we won’t shrink from our responsibilities. Once domestic savings have been trashed those foreign deposits will be worth a lot more in comparison won’t they? And then we can all start again with a clean sheet, that’s only fair for everyone.

    And when the Taoiseach, grave and dignified, appears in an emergency newsflash (as I predicted here long ago) to tell us about the painful but unavoidable measures his government has (with reluctance) been obliged to take in order to address an unsustainable financial crisis and to stave off economic disaster, when he assures us that it’s for the common good, and then goes on to remind us that over the course of our history we have overcome greater setbacks, many of the listeners will not have been taken by surprise, just keeping the head down…

    Someone please convince me I’m being paranoid.

    • Hi Coldblow,
      Okay you’re being paranoid!
      How can you doubt the ability of our political masters to lead us to the promised land?
      Let’s luck at the facts we have been officially told over the last few years;
      1. We are in for a soft landing.
      2. The banks have a bit of a liquidity problem.
      3. Any bailout will prove to be the cheapest ever — not costing a cent to the Irish taxpayer!
      4. Look 3 billion should see us right?
      5. Well maybe………
      6. We’ve turned the corner!
      7. Sorry slight miscalculation there
      8. Eh yeah AIB and BOI well obviously that’s just a slight liquidity problem.
      9. Oh and….
      10. Plus……
      11. Look that’s the height of it now!
      12. IMF are you mad? There’s no IMF coming here!
      13. Oh the IMF just happened to be passing and guess what?
      14. There is no other choice
      15. Four year plan cast in stone
      16. No renegotiation
      17. Okay slight renegotiation
      18. We’ll be paying less interest
      19. Hang on maybe we won’t
      20. Accountable Democracy – Let’s quench corruption!
      21. Okay so effectively all we can do is ask him to vacate his seat.
      22. Okay he’s not giving up his seat so we’ll block his parking spot!

      And coldblow you can be rest assured that what we’re told today is in our best interests.
      Oh yee of little faith! — You’re obviously being paranoid!
      Now are you convinced?

  33. Gege Le Beau

    Quotes from Brian Lenihan since the bank guarantee:

    On Breakfast with Newstalk, April 26 2010.
    First of all, that’s the position in 2009, Eurostat hasn’t decided it yet, that’s our assesment of how they will decide it, we’ll still argue the toss with them. We have to deal with 2010 yet, but let’s assume that you’re right for a minute and that all the €8bn has to be added on in 2010. Let’s assume that. We won’t be borrowing the money, we’ll be borrowing the money over a period of ten or fifteen years. We’ll actually be upfronting — in accountancy terms — the figure, but we will not in fact be borrowing… — April 26 2010.

    Also on Breakfast with Newstalk
    Now that I’m the shareholder in Irish Nationwide I will clearly ensure that whatever money is owed by Mr Fingleton is paid by Mr Fingleton. — April 26 2010.

    Also on Breakfast with Newstalk
    BL: No, no, listen, listen. This not good for the country and it’s inaccurate. If next year we’re obliged to include the €8bn, the €8bn will not actually be borrowed next year the device of the promissory note means we borrow…
    Ivan Yates: No, I know the promissory note is over ten years. You’re missing the point…
    BL: No you’re missing the point! This is an accounting device! This is not real borrowing! What the markets look at is real borrowing. Not accountancy devices… — April 26 2010.

    Speaking to media…
    “The decisive and bold steps we have taken are not popular; and the honest and full disclosure by the Government and its agencies of the appalling mess we have uncovered within our banks has shocked the nation,” Mr Lenihan told the Dail. ”But I do believe that there is recognition among the citizens that the measures we have taken are necessary. And I believe the work of NAMA in cleaning up the banks’ balance sheets and forcing them and their borrowers to face up to their losses is winning the respect of the public.” — April 21 2010,

    Irish Independent
    “One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level… You can now buy in confidence that the price is realistic.” — April 4 2010, Irish Independent
    [Submitted by CO'D]:

    The Financial Regulator has advised that all the financial institutions in Ireland will continue to be subject to normal ongoing regulatory requirements. This very important initiative by the Government is designed to safeguard the Irish financial system and to remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets. As far as the question of ‘moral hazard’ is concerned, it will be a priority for the Government to ensure that the highest regulatory standards and standards of corporate governance apply in all of the institutions concerned including in relation to lending practices to safeguard the interests of taxpayers against any risk of financial loss. -Department of Finance statement, September 30 2008

    [Submitted by CO'D]: During Dáil debate on credit institutions and financial support,
    Olivia Mitchell (FG): We need to see the terms and conditions to know what will happen with regard to these people. Is there any requirement for the banks to restructure their loans? Will they be allowed to make a massive number of repossessions and have fire sales, driving house prices down further and sending the economy into even deeper recession? Has the Government any plan to deal with this?
    Brian Lenihan: This is the plan.
    Olivia Mitchell: [...] However, we need a return to the banks of old – to the image we had of them as being dull, staid, boring, cautious and careful. We no longer have that image. What is the Government’s plan to create the conditions that will ensure this happens? What will happen to restore confidence in the banking system? If we do not restore confidence in the banking system, what the Minister is doing now––. I do not know what the Minister is laughing at.
    Brian Lenihan: I am not laughing. I am allowed to smile. – October 1 2008

    [Submitted by DC]: As reported by Simon Carswell in The Irish Times…
    MINISTER FOR Finance Brian Lenihan has said the bank guarantee scheme was “a necessary first step” and “the cheapest bailout in the world so far”.
    Mr Lenihan said the guarantee was “the cheapest bailout” compared with bank rescues in other countries, including the UK and the US, where “billions and billions of taxpayers’ money are being poured into financial institutions” – October 24 2008

    Irish Times…
    “We are not rushing into the banks without knowing precisely what the position is in those banks” — Nov 20 2008

    During the Stabilisation of Public Finances debate, Dáil Eireann
    In the context of any capitalisation the due diligence exercise will yield further information to enable us to do a far more precise identification of risk before we formulate policy on it. I would be reluctant to commit the taxpayer on any issue connected with risk without a full and definitive assessment of the risk in the institutions themselves and we must await this assessment. – Feb 5 2009

    Following the publication of Anglo Irish Bank’s 2009 results.

    Minister Lenihan said he welcomed the increased scrutiny of Anglo as an opportunity to bring openness to the bank…
    “which will ultimately allow us to draw a line under past activities”. “It is an opportunity for Anglo to employ a fully transparent approach to addressing the inappropriate activities that took place at the bank and provide comprehensive details to all stakeholders who deal with Anglo and who deal with Irish financial institutions generally.” — Irish Independent, Feb 21 2009

    When challenged as to why he was not nationalising banks (at this time the State had already nationalised Anglo Irish Bank and taken a 25 per cent stake in Bank of Ireland and AIB).
    “I do really want to scotch the idea that there are huge risks to the taxpayer in the valuation process because we are not nationalising these institutions.” — Irish Times, May 18 2009

    Nama Bill, Dáil Eireann.
    NAMA will ensure that credit flows again to viable businesses and households by cleansing the balance sheets of Irish banks. This is essential for economic recovery and the generation of employment. It will ensure that we avoid the Japanese outcome of zombie banks that are just ticking over and not making a vibrant contribution to economic growth. — Sept 16 2009

    Nama Bill, Dáil Eireann.
    I am not prepared to contemplate the establishment of an entity that has no responsibility or accountability to this House. — Sept 16 2009

    Nama Bill, Dáil Eireann
    Nothing in the NAMA legislation will result in more repossessions of family homes. — October 14 2009

    On the nationalisation of Anglo, during a debate on banking regulation in the Dáil
    This decisive step was taken to safeguard the interest of the depositors of Anglo Irish Bank and the stability of the economy. I want to assure the House that this decisive step was taken to ensure the new nationalised bank will collect all debts due from persons who owe moneys to the institution. — Feb 18 2009

    On the housing market in 2008 in speech to Seaned Eireann.
    However, what we do know is that the underlying demand for housing remains strong, driven by a relatively young population and continued inward migration. While we may experience a year or two of sub-50,000 completions, it is reasonable to expect over the medium term that annual completions will return to sustainable levels which will remain high by international standards, reflecting the strong underlying demand for housing in Ireland — May 14 2008

    To the Irish Independent, on housing prices…
    One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level. You can now buy in confidence that the price is realistic.” – April 4 2010

    In response to written question from Kathleen Lynch

    Taking account of the advice received the Government has proceeded with a comprehensive recapitalisation of Ireland’s two main banks and with the nationalisation of Anglo Irish Bank. The Government is also in discussions with the other covered institutions, Irish Life & Permanent, Educational Building Society and Irish National Building Society concerning their respective positions. — Feb 18 2009

    In response to a written question from Arthur Morgan

    The recapitalised banks have reconfirmed their commitment to an extensive credit package which will help to increase lending capacity to small and medium enterprises by 10% and to provide an additional 30% capacity for lending to first time buyers in 2009. The credit package also provides for a €100m environmental and clean energy innovation fund to be established by each bank. All the steps that I have outlined have been taken by the Government to ensure that the public interest is secured so that the financial system in Ireland meets the everyday financial needs of individuals, businesses and the overall economy. — March 26 2009

    Written answer to Arthur Morgan
    Our approach will facilitate a sustained flow of credit on a commercial basis to individuals, households and businesses in the real economy. – July 8 2009

    When questioned on the delays in implementing Nama legislation on Morning Ireland
    “We can’t have a lawyers’ bonanza and that is another good reason why we have to get this right.” – May 18 2009

    Written answer to Joan Burton
    Arthur Cox solicitors have been engaged by my Department since September 2008 to provide advice in relation to general banking matters including the Bank Guarantee scheme, the nationalisation of Anglo Irish Bank and the recapitalisation of AIB, Bank of Ireland and Anglo Irish Bank. The company was paid €1,628,024 in 2008 and €2,254,263 has been paid to date in 2009. The sum of €5.4 million has been allocated for legal advice for 2009 and an estimate of €3 million has been set aside for legal advice in 2010.

    PriceWaterhouseCoopers was retained by the Financial Regulator in late 2008 to assist the Financial Regulator with a review of the financial and capital positions of Irish banks and to enable the Financial Regulator to advise the Government on what action needed to be taken. The work undertaken involved an initial high level assessment of the capital and liquidity levels of the institutions, stress testing of the institution’s loan portfolios over a three year period, and review the valuation of properties held as collateral against the main property loans.
    The total fees paid by the Financial Regulator to the company in respect of the work was €3.8 million, which has been completed. In addition, the Financial Regulator has paid €0.84 million to Jones Lang La Salle for financial and property consultancy services in relation to the Bank Guarantee Scheme.
    The National Treasury Management Agency paid a total of €7.3 million to Merrill Lynch for investment banking advice up to 30 June 2009. Following a competitive tender process in July, Rothschild have now been awarded the contract for investment banking advice. The NTMA has also retained an economist however the terms of his contract with the NTMA were agreed on a confidential basis. In addition, following a competitive tender process, the NTMA engaged HSBC and Arthur Cox to provide advice in relation to NAMA. — Sept 22 2009

    http://thestory.ie/quotes-from-brian-lenihan/

    • Gege Le Beau

      Read it and weep given what has just been announced in the Dail and the €24 billion may not be enough.

    • uchrisn

      History has proved neoptism to be a failed system, this is more evidence, I’m sure there’s many a similar list for George W. Bush

      • Gege Le Beau

        There is a year calendar of ‘Bushisms’ which sits on my desk as a reminder of political hubris. Someone creative could do something interesting with the quotes above.

  34. Josey

    So no pension fund left then….next is we sell our national assests…esb, oil fields, gas fields, forests and people.

    Thanks FF/FG/LP and Greens…smashing job :-(

    Josey

    • uchrisn

      Joesy thank your property owing family, friends and neighbours. They voted for Fine Fail in 2007 and Fine Gael/Labor clearly stated their banking policy of continuing to bail out the banks before the last election. Thats what the majority of people of Ireland want.

      Working in different countries taught me something I didn’t realise before. People are not good at seeing their own faults as a nation. They always blame the politicians. So they don’t improve. To improve everyone in Ireland has to think about what they did wrong and what they can do better.

      I didn’t lobby my local politicans in that time about these issues.
      I didnt’ write to the competition authority about the collusion in the property market.
      I didn’t start any tenants assosiation.
      I didn’t get up and do anything really.

      People have started to do these things now, hopefully more will happen in the future.

  35. vincent

    Republic of Missouri, The Change Your Founders Believed In… http://www.youtube.com/watch?v=57UJmlj5BgI&amp

  36. ladygee2

    Will the last person to leave Ireland please turn out the lights!!!!!!!!

  37. breltub

    Something fishy going on in the rent world.

    I am currently moving house as the lease is up. The current place we got 3 years ago for €1050 per month,they now want €1200 for it, after looking around and viewing for the last few days prices seem to have gone up.
    Another friend with a lease ending who has his place for €900 is now being asked for €1000.

    Most of these places are now being handled by an estate agent for a receiver as the original company is out of business and I guess the properties are now ultimately the banks. They are totally inflexible with the rent and are prepared to have no one in a place than drop price.

    I would have thought rents had gone down?

    Or is the the real effect of NAMA and all the bailouts?

    • uchrisn

      That is the effect of property owners and people with invested interest in property in Ireland who fully support collusion in the Irish property market as it benefits them in the short term. They voted for Fine Gaels policies of more bailouts of banks.
      Of course for anyone who studied welfare economics, collusion/monopolies is of a welfare loss to society in general.

      • uchrisn

        Ireland had a long history of unfairness in its property markets. In the 19th century people who made any improvements to their rented houses immediatly had their rent put up. People lived just to pay rents to ‘absentee landlords’.
        The funny thing is they can leave the apt empty cause you are paying for it anyway through the bank bailouts.

  38. Ciaran H

    Some perspective on the Irish banks debts; the Irish 80 billion is approximately equal 960 billion per capita in the UK and un the US it would be 5.75 trillion on the up side our GDP was the same as that of the Egyptians with a population of 80 million. So each Irish person is being forced to pay 16,000 the equivalent in Egypt would be 1,000. Greed like poverty is relative.

  39. Tim

    cbweb, coldblow, …. please keep posting boyos. We must try…..

    Let’s keep at it……..

  40. CitizenWhy

    The international finance community is reporting, and cheering on, that the Irish government is going to nationalize the Irish banks, and then put them into bankruptcy, thereby disowning their debts and putting no more capital into them?

    Could this really be true?. Or will some minor concession from the Brussels/Berlin Axis of Exploitation induce the government to continue the bailouts?

    Read about it here:

    http://zohfutei.notlong.com

  41. ladygee2

    I’m just after watching Richard Bruton’s ‘performance’ on Vincent Browne’s Tonight programme and what it reminded me of was that he’s now talking exactly the same way that Lendahand and Clowen did during the last 2.5 years!!!I know the new government have been left a complete and utter mess by the last shower of idiots, but the way that Richard Bruton was talking they’re just carrying on with the same old mantra that had been spouted by FF since the introduction of the bank guarantee. The ECB are making complete and utter fools of us and this new crowd simply haven’t got the ‘kuhounas’ to see that they are. I believe that it’s just going to get worse and worse and by the time 2013 comes around and this Europe wide burden sharing scheme comes in we’re just going to be ‘thrown to the wolves’.
    As Paul Sommerville mentioned on the Tonight programme the ECB told us politely to F*** OFF last week in Brussels. I say that we should tell Jean Claude and the rest of our so-called European partners to F*** OFF as well!!!!! To hell with them!!!! Where are the so-called benefits of the Lisbon Treaty we were conned into voting for now!!!!

  42. bara

    Well is it not time now to let the people decide on this bailout, or dose this new goverment of ours still think the people are not smart enough to think for them selfs

    • Josey

      Do you really think they’ll give us a chance to decide on anything bar the “kiddies rights” referendum?

      It’s not that the drugs don’t work…state induced soma does work very well.

      It’s that democracy don’t work!!!!

      No one has ever been convicted of Fraud in this Country, Fact!!!!!

  43. The Good Room

    I think before the ECB arrives to town with their printing presses to rubber stamp every paper euro in the country’s banks we should decide where is the ‘good room’ that we can call our own and free us from the dominance of this invasion and where we all can feel safe .

    If we could only occupy it and try to feel the way we once knew what it was like ‘to be real’about ourselves and ‘to feel free among ourselves’.

    I have in my own memorabilia of old stamps I collected as a kid many ‘rubber stamped Hitler Deutschland stamps’ showing defaced original stamps with a ’5 million DM’ black die print marks .These were used in the Weimar Republic at a time when the butt of a ciggarette was worth more that a wad of German currency then.

    Watch at your local railway stations the arrival of these new machines to centralise the new printing processes under the tutelage of the Teutonics Invaders.

    • Bewleys

      This fine Institution has been part of the long history of Irish Coffee .

      Before you drink it the beans are first green in colour before they are roasted to give off that magic aroma we have so long become accustomed to over the long years we can remember aoulde Dublin to be.

      Their green coffee is put into a roaster like the aoulde rotund model that use to be seen in the window.After the roasting the coffee is rich and aromatic to consume.I had the pleasure to have been in the factory that makes these machines on the German / Dutch border when I was doing management research into coffee for Educho Kaffee Mit System in the 80′s.

      In this process the roasting machine adds value to the material ie ‘ green back’.

      When the EMS machines arrive their dark ink will devalue everything you have ever earned and saved and there will be a terrible smell from your mouth afterwards.

      • Crusade of Hope

        After the Saracens retook Vienna from the Turks they did not know what the bags of coffee were and thus begun the business of coffee making in Europe.

        When will the Irish people retake their banks from the Corrupt Irish Bankers ? What will they leave behind them when they flee to tax havens ?

        Will there be any manufacturing business left to commence trading again?

        • German U-Boat Salvaged On The Rocks

          aka : A Perfect Storm

          The recent arrival of a German registered Ship to remove and deliver two Irish Boats from Rossaveal , Connemara on the instructions of foreign banks only to to become swept onto the rocks and since then re-floated gives us some perception of what will be ahead of us to come.

          Removal of Irish hardware by foreign banks is the de rigeur to be seen at a cinema near you.

          Some of those awaiting in the queue may be :

          Bosch, Braun , Audi , Mercedes , Liebherr, Krups , Volkswagen , Kraft , Lidl , Aldi , Mueller , Moeller , etc

          • Gege Le Beau

            Reposting:

            What is infuriating for the Irish citizen with any historical knowledge is the sheer duplicity and hypocrisy of the major European powers.

            The Germans and French must have short memories, the former was bailed out several times in the 20th century after two world wars, the first period of financial renegotiations occurred in the Weimar period, the stress of which arguably sent their Finance Minister to an early grave, but they went through the stages, an absurd Versailles Treaty (our EU/IMF loan), then Dawes Plan, followed by Young Plan until Hitler came along refused to pay reparations and ripped up the Versailles Treaty and reduced the unemployment level (6 million in 1933 to zero by 1936) (massive lending allowed this from guess who?

            The leading financial institutions which enabled him to undertake a public building programme and rearmament), post WWII was a tad different, but a generous Marshall Plan along with other mechanisms helped Germany get off its knees so it could take its place at the centre of the European economy within 20 years (the Soviets wanted Germany broken up and be soley an agricultural based economy for obvious reasons), Franco-German relations were solidified with the Coal and Steel pact which laid the basis for the EEC — the Paris-Bonn Axis, a mutually beneficial arrangement dragging the rest of Europe along.

            Now here they are hammering us over the head after their leading institutions lent recklessly to Irish institutions, those same foreign institutions/investment houses (see the list of Anglo Irish Bondholders) benefitted from the blanket guarantee with billions of citizens money pumped into the banks, another €24 billion is likely to go in while the fabric of Irish society crumbles, the future consequences are frightening to consider. So while Germany has exited the recession, is running around in Afghanistan at considerable expense and is powering ahead economically, we are breathing in the exhaust fumes.

            If they have any sense, they will negotiate a debt write down and cut their losses because this albatross around our necks has the potential to bring Europe down. Time for some real solidarity with the people and not the bankers of Europe.

            Meanwhile Sarkozy and Merkel play domestic politics with serious issues.

          • Gege Le Beau

            From WSJ

            As of the end of the third quarter of 2010, German banks’ total consolidated foreign exposure to Irish banks increased from the previous quarter to $57.8 billion from $47.5 billion. It has more exposure to Irish banks than any other country measured by the BIS, including the U.K. (Factoring the effect of currency fluctuations, and assuming all exposure is in euros, Germany’s exposure still increased by $4.7 billion from the second quarter to the third.)

            Germany’s exposure to the Irish economy as a whole also increased, from $186.4 billion to $208.3 billion, second only to the U.K.’s total exposure of $224.6 billion.

        • Colin

          John,

          Need to correct you here. Vienna never fell to the Turks. The closest the Saracens got to Vienna was Sicily. The Siege of Vienna was lifted by the King of Poland, and this, together with the earlier victory in the naval battle of Lepanto (Greece)- thanks to Don Juan, marked the beginning of the decline of the Ottoman Empire.

        • CitizenWhy

          The Saracens were Arab Muslims, but not Turks, and it was the Turks who made it to the gates of Vienna, but not inside Vienna, Vienna being rescued by the elected King of Poland and his troops. The Turks brought coffee to Europe.

          The Turks, with a navy so powerful it could be compared to the current military might of the USA, also lost the sea battle of Lepanto, with the direct intervention, according to Catholic legend, of Mary the Mother of Christ.

          The Turks also lost the siege of Malta thanks to an incredible display of courage by European knights and the citizens of Malta in one of Europe’s finest hours. Anything in Star Wars could not compare to the defensive cleverness of the knights.

          All of these victories occurred because people stood up and took action on their own behalf – sinn fein, as the Irish used to call it.

          The German banks will rule Ireland until the people take to the streets as in Egypt and Wisconsin. If the Irish people prefer to watch telly, then they will have sealed their fate, and the German Lords of Finance will have even more reason to sneer.

          On the other hand the WSJ says that Ireland next will nationalize the banks, then take them into bankruptcy (as irish law spells out), and thereby repudiate the bank debts. In this scenario the latest capital infusion will stay in Ireland, as a capital base for the two banks that will emerge from the bankruptcy process. We shall see.

      • Josey

        They cannot devalue physical silver or gold though.

        • Yes they can by re-introduction of exchange control legislation at that point you either or both will end up with where you cannot sell for a market price and / or remove from The State and / or compelled to sell it to The State for stipends.

          Maybe you can now understand why the ardagh chalice and many others were hidden . Paul Morriarty is an expert on chalices.

          • Josey

            Mine is hidden in plain sight :-)

            At least it’s a hedge against the digital 1s and 0s monopoly money they’re printing in the ECB.

          • Hi John,
            Don’t talk to me about chalices – My heart’s broke! At this time of year as you know there’s many a person with a merry tiller doing the whole homegrown spuds thing.
            Well here in Ardagh that’s not as straightforward as it might be anywhere else. It turns out that the insurance doesn’t cover your little rotivater if a bit of chalice gets caught up in the works.
            And we’re prone to the worst sort of chalice – that being the encrusted type – those stones can fly anywhere and take your eye out!
            As you know during the 7th century when Ardagh was pumping out the chalices to the known world everything seemed hunky dory. But they were not the most environmentally friendly craftsmen (and craftswomen) and literally must have thrown their reject chalices over a ditch instead of melting down again. Hence our problem here today!
            As for Josey’s comment above, if you think you can’t physically devalue gold and silver?
            Just ask anyone from Ardagh!

          • Josey

            Were the ploughing championships ever held in Ardagh? Or were they a cover for uncovering lost chalices for a bankrupt kingdom?

          • Josey,
            There’s a better chance of the Ploughing Championships being held on the M50! Bleedin’ chalices!!!

          • adamabyss

            Surely there are not that many chalices unearthed in such a fashion? Is this an April Fool’s joke?

          • Joke? I wish!
            The county council recently declined Channel 4′s Time Team. Citing that under council bye-laws Geo-phys is illegal as is all use of metal detecting!
            Planning permission is next to impossible and insurance not paying out on damaged farm equipment.

          • adamabyss

            In that case (and I’m not convinced you are being serious) wouldn’t there potentially be priceless treasures waiting to be found?

          • Priceless? Because of all the council regulations you end up breaking finding something – even accidentally!
            Who’d buy it? And anyway everyone round here has their own!

          • adamabyss

            If you say so Paul, haha!

          • In fairness Adam – You’re too fast for me!

          • adamabyss

            Skepticism is my middle name Paul.

          • Adam,
            I don’t normally condone the use of the “C – word” but I’m afraid I can’t help myself;

            CHALICE!!!

      • Dorothy Jones

        Ah John, the old ‘Kaffee mi System….’

  44. uchrisn

    24 billion. If we sent out lotto sellers to the whole world we would need every single man woman and child to buy a 5 euro ticket each.

    • Gege Le Beau

      Excellently put, illustrates perfectly the sheer lunacy.

      Ireland’s Weimar Republic era enters phase II and default which politicians (including Richard Bruton last night on Vincent Browne) say is not possible, so we can pay this debt, is that it Richard?

      Constantin and Paul Sommerville expect the government to fall in 2012.

  45. Scipio

    David,

    Don’t become an Obama Zombie. Obama’s “rescue” of GM was basically a corporate mugging the aim of which was to funnel money to his auto union backers. In doing so he totally abrogated the “creditor waterfall” which is an integral part of a chapter 11 filing. What this basically means is that he screwed the senior creditors (“the bondholders”) and gave any upside to the unions. His “Auto Czar” Rattner later resigned to fight a “pay to play (aka bribery)” charge in NY.

    GM, like the Irish banks, should have been allowed to go under. They make a crappy product which costs too much to produce. If you really want to see how Obama’s rescue of GM went then pay a visit to Detroit. However, I would advise you to visit during daylight hours and don’t get lost.

    I’m from your vintage but have been outside Ireland since the 80′s. Now based in the US. Never responded to a blog like this. It really saddens me when I see what has happened Ireland but it doesn’t surprise me. The Irish people are sheeple. Not one of these banker charlatans will ever be prosecuted and will sail off to Portugal to enjoy their golden years with “contractually obligated” pensions funded by the taxpayers. How sick.

    I really enjoy your blog and think you have some great ideas. But wisen up about BHO. He’s the American equivalent of Gerry Adams as Taoiseach.

    • StephenKenny

      An American cousin of mine, a life long Democrat, recently described him, in somewhat exasperated tones as, George W. Obama.

    • CitizenWhy

      The GM situation was more complicated than described here.

      The Obama overseer realized he had to fire the entire upper management if GM were to have any chance of survival. These privileged executives talked to NOBODY below them – literally – on the lower floors, they having separate elevators and lunch rooms. innovative ideas were immediately squashed.

      GM has since brought out cars that have met rave reviews with the press and people in test drives. Their new ad campaigns, done by a new agency, are quite effective in attracting younger buyers. The innovative ideas were always there, just squashed by upper management.

      The overseer also helped to negotiate a new Union contract. New worked will be hired on at $14 an hour, instead of the $28 an hour that had prevailed previously. Health benefits have also been curtailed. The overseer remarked that he feared for the future of the American worker, since the same cars could be produced, at the same quality level, in Mexico for $7 an hour. But with the $14 an hour GM will keep production in the US.

      GM is now in good shape, with excellent products, public trust, and strong sales. But then Ford, which was not bailed out, is also in the same good shape. Its upper management, however, has always encouraged innovation.

      I somehow doubt that Obama would do anything to help unions. His rhetoric will be behind unions, but not his actions. He gives the left, traditional or progressive, words only while he acts to make concessions to the right.

      Politically the US has a huge dilemma. The liberal northeast is entirely dependent on Wall St, health insurers, and pharmas for its jobs and tax base, and their lobbyists, aided by the pro-corporate populism of the Tea Party and its capture of the Republican Party, always prevail in government policy making.

  46. uchrisn

    Nice article by George Soros, saying that the Germans are being unreasonable and the German Public has been mis-informed and is confused.
    He thinks a Europe should deal with Irelands banking problem not the Irish government to make it clear to the Germans that their banks are being bailed out.
    http://www.project-syndicate.org/commentary/soros66/English

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