April 13, 2011

No future for our banks without radical thinking

Posted in Irish Independent · 169 comments ·
Share 

DO you find it strange that as a result of reckless lending at AIB, 2,000 people will lose their jobs, yet as a result of the same lending, the bondholders of the same AIB will lose nothing?

Some of the workers who supplied their labour are allowed to lose everything, yet the creditors who supplied capital lose nothing. This is not what capitalism is about. This is a type of cronyism.

In a country where unemployment is running at 14pc while at the same time running a balance of payments surplus, this is clearly the wrong choice to make. Yet we have just made it. We would save much more forcing a debt-for-equity swap on the bondholders than laying off the workers, but we do the opposite. Why?

And if you think that this is the end of it, think again. In the course of the next year we will see thousands of jobs go in Ireland’s banking system, and at the same time the ordinary citizen is expected to put billions of euro into the very banks that are making staff redundant.

Let’s examine the latest figures to see what is happening.

Yesterday, AIB announced it had made a loss of €10.4bn in the past 12 months. When added to the €17.7bn loss Anglo made in 2010, this means that losses from these two banks amount to more than 20pc of Ireland’s 2010 GNP. Or looked at a different way, the losses came to twice the total income tax that Ireland generated in 2010.

There is no future for the banking system here. Irish banks are expected to reduce assets/lending by €500m a week, every week, until the beginning of 2015. The total figure which they will take out of the system is €74bn.

If anyone thinks there will be any lending happening in the economy while that is happening, they are delusional. While there is a strong case to be made for a ‘new bank’ in the economy, the only institution in the country that is even talking about lending at the moment is NAMA, whose chairman said yesterday that NAMA would be willing to lend to ordinary people to allow them to buy houses. So here we have the complete nonsense of a situation where we have banks that we are ploughing money into to keep alive, that will not lend and the only lender in the country prepared to lend is NAMA, which is of course the Government in disguise.

But NAMA’s lending will be under its remit of “supporting” the property market here. And, of course, new house lending is exactly the kind of lending that Ireland does not need at the moment; rather we need money for business, business which can grow to employ the people who will lose their jobs in the banks!

Just how ludicrous has our economic situation become?

And we are doing all this so as not to force our European neighbours to give the bill for their stupidity back to the bondholders. There is only one way this can all end.

Think about what is happening. The banks will take €500m a week out of the economy for the next two and a half years. This is a monetary contraction of enormous magnitude. With such an amount of money leaving the economy, house prices will continue to fall because there is not enough money around to keep them even stable. This leads to more negative equity.

At the same time, the budget deficit will have to be cut and this will cause further contraction in the domestic side of the economy. Hopefully exports can keep growing but as everyone knows these are not labour-intensive industries and buoyant exports, while welcome, won’t do much to dent the dole queues. Remember, unemployment has risen from 4pc in 2006/7 to 14pc now.

Think about what happens in the type of recession that we are experiencing. The people see taxes rising, unemployment rising and house prices falling. They respond to this by getting more nervous about the future. So they save more and more.

But as they save more and more, this means that they stop spending. Because they stop spending, someone else has to spend in Ireland or on Irish products to make sure the economy doesn’t contract more.

We know that the Irish private sector is now saving more than 16pc of total income. As recently as 2006, the private sector here was spending more than it saved; now it is saving a whopping 16pc, because we are worried about the future.

Now here is the nub of the problem: if we are not spending, who is? Or to put it another way, if we are not spending and the Government also stops spending, what happens to the economy? It goes into freefall. This downward spiral is made worse by the credit crunch caused by the banks deleveraging to the tune of €500m a week.

So what is likely to happen? Well the first thing that will happen is that the Government will fail to meet the fiscal targets it has set itself under the IMF/EU deal. This might not happen for want of trying but because we would have to sell so much abroad to compensate for the lack of spending by the Government and the private sector. This will not happen for two reasons. The first is that the euro is still strong against our trading partners so there is no real competitive advantage coming our way and the other is that the ECB is now raising interest rates, which will cause us to save even more!

In short, we are in a cul de sac and only truly radical thinking will save us. It can be done: the Government has a mandate and could still act on it.


  1. Again david I can’t argue with what prose you have splatterd out for those that read you, but You had a chance over the last three years to set up your Own party and you like O’Toole and Dunphy backed down. So today you take a wage from Tony & Co and write a few books give a few talks and sometimes arrive for the after dinner speech or the late night in Temple bar !… Leadership is what is needed Truth is in a modern worild , Work as ‘we’ see it now will be a thing of the past as via broad band we can do Global Business in services and exporting.
    So why not instead of playing ‘the I’m all right card’ ?,..form Your Own Party , why not take on the vetanires ,why should I listen or have to year what an 80th year old says when We are still paying him a Leaders pesnsion …to be continued

    • MjHi

      Work is a thing of the past interesting.Well as a small business man I disagree.When I was growing up in the 80s we were told that machines & computers would replace us.When I started my own business we had a IT boom in Ireland that resulted in more work for the likes of me not only in Ireland but Globaly.I am a global business man in the service industry.If you want to do Business on line the end result of that is my business.Something goes on my truck & goes somewhere. That will never change.The more e-comerce the more work that has to be done thats a rule.Even if we run out oil it wont change.I in return support you & other non e-commerce entreprises.So please come up with a better idea.If theres to be a recovery there will be lots of men & woman doing ordinary work.

    • adamabyss

      Welcome back BrendanW. Where have you been? I have missed your forthright posts.

    • stiofanc02

      Where ever you have been it is time to go back. This is the kind of thoughtless crap, a soundbite on a blog, that does nothing constructive. You my boy, havent a clue of what McWilliams would have had to give up in order to get a Dail seat and as well as that I personally believe he didnt really want to be a politician but found huge support over the years when his fans like me said YOU DA MAN! He has a young family and a hugley succesful career. Anyway, you are a typical blogger, nothing else just a blogger. When you can produce like D.Mac you can criticize, but until then, back to net surfing and nintendo for you. “2 girls one cup” for you and your sophomoric attempt at scolding your superior bud. You lose.

    • Deco

      They were trying to form their own party.

      Then we had that absurd episode where Joan Burton wanted the Finance Bill shoved through the Dail as soon as possible to make the election happen before any new options got to the point of being able to fight the election. Basically, Joan the Moan wanted to monopolize the options available to the electorate.

      • Malcolm McClure

        Deo: I’m inclined t agree with you. There was a move to form an alternative building up, but the rush to have an election nipped it in the bud.
        Anyway, so far, there are no signs that the unseemly haste to the ballot has improved the situation one iota. The new lot are like kids on their first day at a new school. For politicians, like kids, the first question is always “Please miss, where’s the lavvy?”

  2. Gege Le Beau

    What is happening in the banking sector (inevitable layoffs) is exactly what capitalism is about, management exploited the labour of staff and the pockets of customers to further their profits, increase bonuses and provide bigger dividends for shareholders. When things go off the rails, management remain, staff are laid off, branches closed, mortgage interests rates increased, those who can’t pay are pursued through the courts (regardless of the national/individual circumstances) and the citizen bails out their negligent operations which have so tarnished the institutions that they should be closed permanently.

    Recessionary periods have several characteristics including: decline in consumption, increased savings, rise in unemployment and the emergence of monopolies, or in the case of the Irish banking sector, a duopoly. In Ireland, instead of rapid and radical change, the clocks were simply turned back as if the boom-bust cycle never happened, we are back to pre-boom Ireland where AIB and BOI were the two dominant banks while foreign competition has retreated from a car crash economy.

    The senior banking management principally responsible for the disaster are either still in position or were given golden handshakes because they know where the bodies are buried and are living as if they were party to none of it.

    Capitalism in its current form sees the socialisation of debt and the privatisation of profit, the continuation of what the Financial Times called ‘cosy capitalism of the worst kind’. Capitalism is not some benevolent life force, it is an exploitative system whose sole raison d’etre is the profit motive, if this is not evident to all concerned now then it never will be but as Upton Sinclair wrote “it is impossible for someone to understand something when their salary depends on them not understanding”.

    4,450,446 citizens now carry an unsustainable debt burden unfairly foisted on their hard pressed shoulders. That is capitalism/State capitalism, the masses carry the tab for the few who have made off like bandits.

    The societal consequences of this debt burden are soon to be felt, I heard from a community worker today who told me that his project with a certain section of the population is being shut down and the funding for his position ended, he is out of a job in Septemnber. He has a wife, a young child, a mortgage and broke down today telling me his story.

    Meanwhile, €660,000 was given by American philantrophist, Chuck Feeney to fund ‘We the Citizen’ which will hold forums around the country ostensibly to ‘find out what the citizen thinks’, something which could easily have been done virtually with low overheads and possibly the equal results. More talk which as the community worker said to me, is stuff which is already well documented but there isn’t the money to execute.

    • Gege Le Beau

      This is what this system does, it crushes people, one every day, this is no Republic where people are protected and some arrangement agreed, people are left to fend for themselves, where are the societal guardians? A truly shameful period in our nations history, what did our ancestors fight and give their lives for, to be enslaved by finance?

      The man featured in the article below could be any one of us tomorrow while the big boys attend dinners for the Prince of Monaco………Who are we becoming?

      “Man left a homeless alcoholic over loan arrears”

      A MAN was left homeless and suffering from alcohol addiction after he lost his land and stables when he was unable to repay a bank loan.

      The tragic circumstances were outlined in the High Court yesterday, where a senior judge asked that the man, who has separated from his wife, not be identified.
      http://www.independent.ie/national-news/man-left-a-homeless-alcoholic-over-loan-arrears-2616070.html

      • mulcahy

        Should have done this a long time ago, but:
        - Exit the Euro
        - Print the Punt
        - Devalue the Punt
        - Maintain low interest rates until a marked recovery
        - Default the bank bondholders
        - Default the short term ECB loans (they were the lender of last resort after all)
        - Sell all our banks to well capitalized foreign banks for €1 each which will maintain a functioning clearing system
        - We don’t need indigenous banks, we need indigenous monetary control. Ireland does not come in for consideration at an ECB meeting
        - Without banking liabilities the Sovereign Balance Sheet is not too bad, borrow from International Capital Markets to fund the budget deficit until it gets balanced over the next few years

        The politicians will spin that this is impossible, who would lend to a country that does all this?….yeah Iceland are really getting their comeuppance right now aren’t they. The Icelanders have shown real courage, something our politicians have lacked while they go pandering to Brussels negotiating over the likes of a 1% interest rate reduction.

        They have put so much spin out there that coming home with a 1% reduction will be marked as some form of victory, while it’s the Principal they should be fighting over. It’s criminal that they have agreed to lumber the Irish Nation with honouring bank bondholder Principal, and all they can talk about is 1%.

        • Deco

          Our debt will still be in Euros.

          Better idea, tell the bondholders that their bus ride on the backs of the Irish taxpayers is over, and that they are going to get dislodged at the next stop.

          Instead of taking lectures in capitalism from paid agents of the banking system, time to give them an applied lesson.

    • uchrisn

      That is actually an interesting initiative by Chuck Feeny, I wonder has it got any regonition by top civil servants/professionals/politicans/economicts who would agree to implement results.

      • Deco

        The strange thing is that these authority holders on state salaries. need Chuck Feeney to make up for their incompetence, and the fact that basic services are shortchanged as a result of them getting their cur first.

        • Praetorian

          I find it surprising that given the makeup of those involved, leading people from the arts, academia and elsewhere that they needed the backing of Feeney’s dollars to pull off what basically could have been held at little to no expense in community centres around the country (not 4-5 star hotels like the Clarion with supper included – needless) connecting with the disenfranchised, excluded, disadvantaged, those who really need to feel they have an input.

          I expect next to nothing to come from it because as it has been pointed out the strucuture of power won’t be changed especially by people who laregely depend on such structures for their status and income. The money could have been used to fun those on the ground who actually work in the trenches, on the front line in community and social work, certainly not relatively well paid, secure academics who write about change, give papers on political reform (were they effective agents of change during the boom?).

          People know what needs to be done, even if this group put a well intentional list together, do you think for a second if it challenges the business-power elite in this country that any of it would be taken onboard? David McWilliams has been writing about possible solutions/measures that can be taken for years, Morgan Kelly the same, Constantin Gurdgiev, Brian Lucey and a host of other experts, were they listened to?

          People need to get real because it is giving the false impression that by showing up at a seminar in comfortable surroudings that they can somehow have an impact, think we have been here before.

    • shtove

      Load of balls.

      That’s not capitalism – it’s socialism, where the beneficiaries of corruption are selected by politicians, and the politicians are captured by the beneficiaries.

      The market is the best selector, because it’s made up of people interacting at arm’s length. That requires honest exchange mechanisms, which is difficult. So not perfect, but whenever imperfection crops up the people have the choice to work it out.

      Instead we get an infinite pyramid scheme, and sadly Irish people are willing to vote for this fantasy. But pyramid schemes are designed to end in disaster.

  3. CuChualainn

    David has done a lot more than splatter prose out for YOU, me and others to read. He is as entitled as anyone else, including you and I to earn a wage in any legal way he chooses. Any card I have ever heard David play has been 100% on the mark. I have been more than impressed, in fact sometimes amazed, by his tireless efforts to debunk the nonsense that emanates from what passes for political, business and economic leadership in this country and to promote policies that respect the needs and rights of Irish people over protecting the alleged risk takers (aka bond holders) from their beloved free market forces.
    I’m sorry, but I have no clue why you should read or listen to anything but nobody is forcing you to do either.

  4. Peter Atkinson

    David, at least once a week you post an article on how futile the future of our banks are yet you may as well be talking about Manchester United not making a top 4 finish in the Premiership.Nobody believes you and as a result they have now become immune to your commentary.Here we are with a new regime and the real estate company NAMA have the balls to say they want to kick start the property market.Talk about originality.Those tossers know nothing but bricks and mortar and firmly believe that we will relaunch the good ship Ireland when they raise the wreck called the property game.Well a message to all you merchant bankers.Think again.Its over.Never again will any poor soul listen to the so called financial advisors in their cheap suits and their Porches.As a nation if we had the collective balls to tell the banks to f**k off I wonder what they would do.Its not like repossessing a Porche and putting it up for auction.Lets see the real gougers who put a bid on a repossessed property on foot of someone’s misery.Look around you at the same said auctioneers making a bomb selling repossessed goods.Its all done on the internet now.Faceless carpetbaggers.The real Boomtown Rats.Lookin after No 1.

  5. PMC

    So help me God, if what I read today is true.

    Firstly, that NAMA is going to be lending money via the banks to “kickstart” the property market again.

    This has nothing to do with kickstarting the property market in a fair sensible way, this is about re-inflating the property bubble again so that NAMA itself doesn’t lose its arse on the properties they have on their books. It’s also about trying to create some positive PR for NAMA, under the guise of it now being a good little organisation that’s prepared to lend some money to the little boys and girls who’d like to buy their first little home.

    The proposal is, that NAMA provides mortgage funding to people via the banks to purchase NAMA properties only. If this isn’t the most blaytant conjob ever then I don’t know what is.
    This is manipulating the “market”. People aren’t buying because there’s no bloody value. End of story!

    Irish property still has a long way to fall as the VALUES being placed on many properties is still pie in the sky.

    Who in their right mind would fork out in excess of EUR 300,000 for a council house in Dublin.
    There is absolutely no value whatsoever in this.
    The value for such a house in my opinion would honestly be about 50K max.

    Secondly, there are now plans by AIB to write off a certain amount of mortgage debt by using some of the recent EUR 13 Billion of taxpayers money.

    So let me get this straight, as someone who saw the property mania for what it was – I now have to pay for not only the mistakes of the Financial Regulator, Banks, Civil Service, and Government, but now I also must pay extra for those who couldn’t see beyond tomorrow and sadled themselves with ridiculous mortgages that are now unsustainable.

    I swear to Christ, if either of these proposals go ahead; I will be packing my bags and never again will I be coming back to this joke of an island and the useless pricks that run the place.

    There can be no doubt, it’s one of the most absurd little places on the planet.

    Also, what part of the basic synopsis, whereby Ireland must experience year on year growth of 9% just to service the ECB/IMF loans i.e stand still, does Richard Bruton not understand? Growth will be 0.5% this year at best.

    • Gege Le Beau

      They are desperately fighting against the tide, trying to re-inflate a dead duck, people will not purchase given such economic uncertainly and declining house prices.

      NAMA’s antics though are a good illustration how elites work though, they are prepared to go against even the massive external debt and the prevailing economic conditions and continue along a failed path rather than implement policies that benefit people.

      Those same people would want to be out of their minds to purchase a property now when it could be down 20-25% in 18 months that is if they can even get a mortgage, maybe the high rollers and professional class can do so but the numbers can’t be large.

      I suspect this may well be the last desperate measure to hold off a housing crash which to my mind has to come especially with 100,000 households in mortgage difficulty with more on the way as unemployment continues to rise.

      Sit back and watch them burn at their own gambling table, only revenge I can think government taking on those prudent enough to wait and see is increased taxes and cuts to public sector pay, if that happens then you may see another exodus.

    • Praetorian

      Maybe its a case of a lot of the same professionals who were involved in boom mark I, simply took up positions in NAMA for property effort mark II (rebranded), not only do they have a property section, but they also the manage ‘assets’ and winding down liabilities game, at least 30 years work in that, so many will see their careers out and with some high levels of pay in recessionary times.

      Possibly the ‘best’ reinvention since Kylie Minogue’s third album. Someone mentioned the cost of running NAMA was €1.6 billion in fees, if they go into property they will set themselves up for life as the only game in town, while the other two entities limp on.

    • PMC

      The entire scenario is gone beyond repair.
      Political figures in Ireland are just completely and utterly out of their depth in their understanding of both the micro and macro factors required in running a successful state.

      If this country ever honestly wants to recover from this, people like David, Constantin Gurdiev etc… should be placed in power. Smart, independent people who understand their areas of expertise.

      This will NEVER happen in Ireland as there’s a perverse mindset that is utterly ingrained in society. North Tipperary being the heartland, given the gobshites that turned out to give their support to Michael “Borrisokane Ballagio” Lowry.

      • Deco

        “Las Vegas in Two Mile Borris”.

        Sounds like an episode of a Pat Shortt comedy show.

        Lowry also wants to “bring gambling into the 21st Century”.

        We don’t need Las Vegas in 2Ml Borris, to bring gambling into the 21st Century – we have the state banking policy, and NAMA – is that not enough gambling in the 21st C ?

    • JuicyLucy

      I agree, if a house is renting for €850 per month that is €850x 12 = €10,200 per annum. 10,200/10%= €102,000. So a house bought at €102,000 will give a 10% annual return (10,200/12 = €850 per month rent) BEFORE rates,taxes,insurance and maintaince and probably a 6% annual return on investment AFTER rates,taxes etc….most houses renting for 850 per month still have asking prices of 250K +. What is NAMA playing at giving loans. NAMA has no ASSETS it only has LIABILITIES, just like the US Federal Reserve, is not US, GOVENMENT owned or a Reserve that stores anything, its a private banking farce that supplies the us government with what it can never get enough of, MONEY , which it PRINTS out of THIN AIR.

    • Deco

      {
      Who in their right mind would fork out in excess of EUR 300,000 for a council house in Dublin.
      There is absolutely no value whatsoever in this.
      The value for such a house in my opinion would honestly be about 50K max.
      }
      I reckon that the people who forked out 300 K for a council house, will probably end up eventually getting it all cleared. It may take longer than expected.

      But the people who paid 800K for a pad in Leopardstown or Celbridge, or other brandname locations – they are in dire trouble. As the NYC yanks say “Hey, Lissen, Fohgeddabouttid”.

    • coldblow

      When Max Keiser was informed of the new NAMA lending plans on VB last night he immediately cried out: “Ponzi Scheme!” He also wondered why the nation’s politicians were not representing the interests of the Irish people (a similar question is asked in one of Michael Hudson’s latest articles). It must be, he said, because the govt are the banks.

      I’d never seen him before so I stayed up to watch even though I was knackered. It was a bit like an Apres Match or a Muppets sketch. Gurdgiev infomred VB that you can’t spend “hope Euros” or live on “hope food”. Max Keiser suggested ringing up Seanie there and then to discuss the corruption and VB was scandalized like a pantomime dame and rushed in to defend his “honour”. Lucey explained to VB what a vanilla pod was. Sommerville poured elaborate scorn on any suggestion that the ECB would ever withdraw liquidity. And the girl (Lara Noonan?) merely added to mix: “They are NOT estimates!!! They are NOT estimates!!!” and her surreal references to the “two pillar banks” (wha’?!). Gurdgiev conceded that AIB could indeed become a “pillar bank” in the future – provided,that is, it first ceased to be AIB seeing as AIB bank is smashed beyond the faintest hope of redemption.

      Definitely an evening of new wine in old skins…

      • Deco

        Two Pillar banks. Absolute nonsense. Neither of them is a pillar of anything. This is pure imagination from the Minister who brought us the Brigid McCole scandal.

        Two Pillock banks would be a more accurate statement. Two absolute joker outfits.

  6. adamabyss

    subscribe.

  7. MjHi

    David I now believe you.I think we are being led to slaughter.The Revenue commissioners and the banks have told me that I will pay a heavy price for my companies debts.I am on disabilty now because the stress of being self employed has taken its toll.Even though I have made mistakes I was not a big business man but I loved what I did & i was good at it.We had living a hard one but a living.The new government has not made any real changes & maybe they cant & even though you would not agree with me is it time for Irish people like me to rise up even violently.The politicians that we have now are doing no better for us than when there was a British administration in charge here & I feel that even the new government cant tell us whats going on because they are afraid of the reaction.To me this is treason
    & we should be told everything now so we as citizans can make the call as we have to carry the burden.I have 4 children from 10 months to 8years & I will protect them because my own country cant.I read your posts regularly looking for signs of life & I trust what you say.What can we do.

  8. Sidenote on Vincent Brown tonight.

    Since he interviewed Honahan, Vincent is brainwashed.

    Waste of space watching.

    • JuicyLucy

      Max Keiser was on Vicent BRowne tonight, brilliant, watch all his shows on RT news, David Mcwilliams was on the Keiser report not to long ago, great minds think a like.

      People should stop paying their mortgages and use the ban on repossesions to fill up their wallets till the banks turn up to take the house, then give the banks the house, and fly out of the country (fly from belfast if they’ll stop you at dublin or shannon) with their kids and start a new life next door with a wallet full of cash (maybe 2 years worth of morgage payments). People are to emotional about a HOUSE, if you lose it, so what, you can buy another one later, big deal.

    • JuicyLucy

      Honahan is another Dipshit!, everything he says is a joke, he’s another one of these BOOK SMARTS. BOOK SMARTS get top marks at school, uni etc and never make mistakes, and because they never make mistakes they never learn anything, but everybody makes mistakes so when BOOK SMARTS make mistakes the mistakes are GIGANTIC because they never made lots of tiny mistakes along the way to learn from them. Give me a guy who FAILED he’s way through school, university, professional exams, worked and stuck at it, and you’ll get a real leader who’s learnt from all his MISTAKES as he progressed. This Country is stuffed cause the government and public sector is packed with BOOK SMARTS and thats why this crash is GIGANTIC!

      • Deco

        Actually, I reckon Honahan is a fundamentally decent human being, in a nasty situation, for which he is not intellectually sufficient. Of course he could prove me wrong. It is the purely on the scale of the mess.

        • You know him?

          Well, so they say about Joseph Ackermann, the most dangerous 25% Banker on the planet according to Simon Johnson, but what is the point? It is like stating that Loyd Blankenfein is a good neighbor and caring father.

          I for one can not say anything about the decency of Honahan as a human being, I am in no position to say one way or the other, sinply vecuase I do not know the man, but what I can say is that he was in the negotiations with EU and IMF that are responsible for the so called bailout deal.

          I suggest if anyone wants to get a little deeper inside into the world of P. Honahan, he can start here:

          http://homepage.eircom.net/~phonohan/cv.pdf

          and here

          http://homepage.eircom.net/~phonohan/Biblipg.pdf

          or here:

          http://econpapers.repec.org/RAS/pho42.htm

          or here:

          http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=66346

          I for one remain deeply sceptic on Insiders like him who was praised by FF right wing gombeens when recruited to his CBoI position.

          In the VB Interview I referred to, he was playing rhetoric games with VB, and painting the much greater evil on the wall in cause we would burn bondholders.

          This tactic undoubtedly works on the great masses of headline consuming people, and I see it just as such, a propagandistic statement designed to plant a meme. These chaps are not dumb you know, and they know how to work the media and gullible media clowns such as VB.

        • You know him?

          Well, so they say about Joseph Ackermann, the most dangerous 25% Banker on the planet according to Simon Johnson, but what is the point? It is like stating that Loyd Blankenfein is a good neighbor and caring father.

          I for one can not say anything about the decency of Honahan as a human being, I am in no position to say one way or the other, sinply vecuase I do not know the man, but what I can say is that he was in the negotiations with EU and IMF that are responsible for the so called bailout deal.

          I suggest if anyone wants to get a little deeper inside into the world of P. Honahan, he can start here:

          http://econpapers.repec.org/RAS/pho42.htm

          or here:

          http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=66346

          I for one remain deeply sceptic on Insiders like him who was praised by FF right wing gombeens when recruited to his CBoI position.

          In the VB Interview I referred to, he was playing rhetoric games with VB, and painting the much greater evil on the wall in cause we would burn bondholders.

          This tactic undoubtedly works on the great masses of headline consuming people, and I see it just as such, a propagandistic statement designed to plant a meme. These chaps are not dumb you know, and they know how to work the media and gullible media clowns such as VB.

          • Deco

            I am basing my opinion fro what I have learned from listening him through the media. It is not a great place to rely upon for a true picture.

            Georg, by the sound of things you have him sussed better than I. Anybody who gets praise from Lenihan, Cowen et al must be doing a lousy job. Based on previous statements by those two.

          • Deco,

            P.H., in his current position, sits here as well:

            http://www.ecb.int/ecb/orga/decisions/govc/html/index.en.html

            Hence it is fair to state that he is to be considered a EU insider, as inside as can be, and as such his answer to VB in this ‘famous’ interview was somewhat ridiculous imho, to play the fear card without coming forward with specifics.

            To state that they would have calculated the risk – Who is they? – and came to the conclusion that a default on Banksters and Sen. BH would cause greater damage to Ireland than to pay up to them, well, why did Vincent not ask for specifics of this calculation?

            I do not trust this a single second, and I am not reading anything into it, but observe the statements in context.

            Without coming forward with specifics on this mysterious calculation, no one can criticize it, simply because we do not know, hence he puts himself in a Sledgehammer position ‘Trust me!’.

            It is this culture of elitist secrecy that has brought us where we are in the first place, and I reject it.

            The fear game is as old as is politics, it is a means to manipulate the masses, and if you ask me, it stinks rotten. The game that is played here on the public is to present PH as the good guy who cares for the people of Ireland and their wellbeing, and the media clown VB played right into this….I mean… come on….

          • Praetorian

            An article on Honohan revealed he had acted as an advisor to Fitzgerald’s FG government in the 1980s, worked in the IMF for a short period and a longer time at the World Bank, PhD from the LSE – nothing in any of that inspires confidence while a recent interview with Vincent Browne raised more questions than answered them in my mind while further recapitalisation of the banks is hardly mind-blowing radicalism.

            Irish Times interview
            http://www.irishtimes.com/newspaper/finance/2011/0415/1224294725313.html

      • coldblow

        Yes, but what about Seanie, Fingers, Quinner, most of the developers, you know, the graduates from the univesity of life, the “guys” with the b*lls to get out there and kick ar*e and make things happen?

      • AH

        Lucy, I am heartened by your writing. The state bodies of power, set up during the tiger economy, are nothing more than a collection of pen-pushers, blockers, yes-men, and booksmarts. The country is awash with beureaucratic no-can-do-ers, who have never contributed anything to the real national forward movement, or progression of our country as a state of citizens. The environment and context within which we the unemployed are going to be helped back into the workplace, is on their terms, again. All government populist chattering about reducing unemployment amounts to nothing more than lip service. The whole attitude to enablement of a workforce in this country has to be wiped clean, and completely done away with. I don’t need their help, if it amounts to conducting myself on their terms. I’m not going to work for anyone that tells me we owe anything to Europe. And they’re not getting any cut of my profits. Everyone should go DARK!

      • PMC

        I agree entirely; that’s exactly it.
        “Book Smarts” who can stuff all sorts of print into their brains but when it comes to the practicalities of real issues, we can forget it.

        They’re masters at learned behaviour; yet lacking severely when it comes to common sense.
        Does anyone think that those tribunals were worth a single cent?
        The findings are as plain as day before the tribunals even begin, yet we waste 14 years of time and money with this BS.

        To think also, that Ivor Callely was re-imbursed EUR 17K for the 20 days he missed in the Seanad over his deceitful behaviour would drive you to drink.

        All the pussyfooting around with the technicalities of law needs to end. If some punk is acting the clown and taking the mick, then he gets turfed immediately.

        I know VB has to be impartial on his show, but he was going too far in my opinion in defending Lowry and his rights in relation to the Moriarty Tribunal.

        Lowry would be laughing his socks off sitting in his armchair watching that. Instead of constantly making life perversely difficult for ourselves in such circumstances, we should be looking at ways to get rid of Lowry et al as fast as bloody well possible.

        • Being an outsider in this country gives you an advantage and many Irish people themselves are as much of an outsider as me or any other foreigner. I would not like to have been born here and have to stomach the likes of Lowry and Browne being seen by the world as representative of Irish people

          They are not. They are just chancers trying to survive under a brutal system and we let them flourish thanks to our apathy and waiting for someone else to educate the Irish that more gombeenism is not what we signed up for. Browne defending Fitzpatrick and Lowry makes my skin crawl and I hope that his actions have made more Irish people see him for what he really is. Full of shit

          By the way there are many people with masters degrees who are as thick as shit and are not practically minded at all. Having a masters degree or being a book-smart proves nothing. The ones who have masters degrees and are handicapped with religion are even more useless

          Does anyone know where Vinnie get his blue rinses? My granny need her hair done

          • PMC

            I agree, and this is I why I think the education system that we’re all so “proud” off needs to be overhauled.

            There is far to much emphasis on Degrees, Masters Degrees etc in Ireland and the world for that matter…
            Education of course nowadays, is a multi-million dollar business all over the world therefore it suits many Governments and others to keep this charade going.

            Many youngsters could leave second-level education and do really well in a professional environment.
            There are of course specialised areas such as Medicine that clearly require dedication through a course of study, but to think that DIT offer a full-time course in Bar Management!
            This is waste of tax.

          • adamabyss

            David’s friend Ha-Joon Chang makes exactly the same point about degrees and masters degrees in his excellent book “23 Things They Don’t Tell You About Capitalism”. Having said that, I’ll probably do a Masters myself after I finish undergraduate.

          • @adamabyss

            There is nothing wrong with wanting to push yourself and I wish you luck. I hope you choose a subject that you are genuinely interested in that you might see yourself studying for the rest of your life. That way you would be doing it for yourself and to satisfy your own curiosity.

            In a previous life I worked with chemical engineers who were qualified to masters and phd level. The most clever of them all was the guy in the team who had a degree. He looked like a genius compared to the others because he had all the other skills required in a well rounded person – practical, good written and verbal communication skills and the ability to think laterally.

            ———————————————————-
            Here is interesting read

            Why an MBA Is a Waste of Time and Money:

            http://www.bnet.com/blog/penelope-trunk/why-an-mba-is-a-waste-of-time-and-money/152

          • adamabyss

            Cheers Paul.
            I am studying Business & Management which I love., particularly because I worked as a Business Manager for 10 years previous to going back to University.
            I will read that link you supplied.
            Adam.

          • adamabyss

            The article was a bit lightweight I have to say Paul, without going into any more detail.

            Looking at the comments below it, one thing that always strikes me about American forums is how quickly the respondents resort to personal insults, put-down and one-gunmanship. There’s something wrong with a lot of the people who hang around on the Internet over there (in my opinion). Even on the likes of the New Scientist website (where I enjoy a lot of the articles) they always immediately start trading abuse. Says something about the mentality in the USA I guess. Good manners seems to be a thing of the past.

            The jousting that manifests on this site is tame by comparison.

          • adamabyss

            Oneupmanship, sorry, dopey spell checker.

    • Dorothy Jones

      At first I thought VB was taking the ‘proverbial’. I just watched it again, was he being serious? Max Keiser makes great copy as they say. Paul Sommerville spot on and ahead of the posse as usual. It would be inappropriate to air my views on the input by the female member of the panel…

  9. chrisi313

    Money is the blood of the modern capitalist system, and our money is Euros. But with all these demands on our Euros, wage cuts, welfare cuts, price cuts, Euros going abroad for oil, Euros going for interest, Euros going for food and cars, there’s not going to be many Euros left in the country with which to trade goods and services with each other. Deflation is the order of the day, and while it seems like a good idea on paper, Japan’s experience with it in the 1990s, which became known as the “lost decade” and America’s, during the 1930′s which became known as the “Great Depression” (you might have heard of it) show otherwise.

    Is Ireland going to be the first country ever to deflate its way out of a recession? Cos staying in the Euro is choosing deflation. Don’t worry about the banks, all we’re doing there is swapping some worthless bank bonds for some worthless government bonds. Neither the Irish banks nor the Irish state can repay their debt, so relax. I can see the government wisdom in the current course of action, stay calm, pretend everything is alright, take your huge, unsustainable salary, paid in Euros, and put it aside, knowing the proverbial excrement is entering proximity of the air circulation device. That’s what David’s 16% savings rate is caused by. Just another big Irish scam, like the Hospital Sweepstakes.

    • JuicyLucy

      Don’t worry, the EU/IMF deal got rid of FINA FOIL and the 2013 Irish default will get rid of FINA GAIL, and then we can leave the past behind and look to a future where anybody can become Prime Minister, not just someone from a certain profession (teacher) or family (Brutons, Lenihans, Healy-Rae’s, etc, etc, etc..)

    • shtove

      Japan had its lost TWO decades because the state decided to prop up insolvent banks. They’ve actually done OK out of it – so far – because Japanese people had plenty of savings to soak up state debt.

      But now the savings have run out and the inevitable can’t be put off any longer.

      In the long run, deflation has to happen, bad debts have to be liquidated. I know Keynes said “In the long run we’re all dead” – but he was fairly old when he said it!

      Anyway, it’s clear the current generation in power has no idea how to clear the system. Question is what does the next generation have in mind? Emigrate, or Kill? I think they’ll refuse to pay taxes to fund public sector pensions.

      • coldblow

        I think you’re right about the pensions. I’ve been buying back years in my pension for some time now, more than 100 euros per week. Later PS entrants can’t avail of this scheme any more. I am very tempted to just pull out of it because I don’t think it will bring me any benefit by the time I retire. I don’t need to do this as I have enough money to get by on, but just to prove a point.

  10. Good writing David

    The numbers are truly shocking but what I want to know is where are the cuts going to be made in 2012-2016? Does the government’s 5 point plan explain who is going to be picking up the tab? They have made it clear they have no intention of listening to or acting on behalf of the people in this country. We have a right wing party who always takes care of the rich and a champagne socialist party who have had their balls removed through favours owed to powerful political masters

    If it going to be the sick, the poor and the marginalised who are targeted in order to avoid chasing real tax dodgers then I am afraid this country is heading for serious social unrest. The politicians are way off the mark as they are seriously underestimating the levels of anger out there and
    how quickly people have clicked that they are just continuity FF spinning the same old bs

    Ireland is a divine comedy and it gets more perverted with each passing day. I personally think the place is a lunatic asylum and I would leave tomorrow if I had the funds but there are sign of hope yet

    There are some commentators who speak for sanity but their voices are being ignored. There are more of them on the scene since the last election and they are a welcome addition to the debate. Hopefully there will now be more real debate rather than the head in the sand rantings from the likes of RTE

    I watched the Vincent Browne show and even Max Keiser could not waken up the brainwashed host who is supposed to be on of our most outspoken commentators. People like he an Laura Noonan need slapping around with a trout and told to waken up

    Meanwhile the comedy continues but the laughing stop when you know that the policies being undertaken in Ireland are today actually killing people and driving others to despair

    It is morally wrong and I say Enough!

    • JuicyLucy

      Its easier to change yourself rather than trying to change others, so Vincent Browne and that Laura Noonan clown will believe that the new government is not corrupt and they will suffer the consequences like working harder to pay higher taxes while watching the value of their pensions collapse, house values collapse, and family members emigrating, while the people who follow guys like Max Keiser, David Mcwilliams, Robert Kiyosaki etc… will stay away from pension funds, buy actual silver (not paper silver or gold like Eddie Hobbs promotes)and take whatever steps needed to reduce paying taxes and interest on debt any debt(mortgages, car loans, personal loans) and stay out of debt. The more debt you have the POORER you are and right now Ireland is a very very poor country. Take away social welfare and you’ll quickly discover that 50% of the irish population depends on the state for support in some kind of form one way or another. Ireland is not wealthy, never was and unless things change, never will be.

      • Deco

        Laura Noonan clearly knows nothing about economics, except in the sense that she will benefit economically by siding with the insiders.

        I agree with you concerning Robert Kiyosaki – very wise and shrewd man concerning money, and how working people get shafted by the tax system. His approach, you can’t change it. Therefore adapt.

    • Deco

      New government, different pecking order amongst the insiders.

      Outsiders are still facing into the cold wind or reality. As usual.

    • People like he an Laura Noonan need slapping around with a trout and told to waken up

      Hehehehe…..[gasping for air]…. Thanks, I needed that!

  11. David, having emigrated from Ireland to Canada in the last 10 days, your article makes for sobering reading and makes me wonder when (if ever) people like me will ever get the chance to live and work in an Ireland with decent job prospects and opportunities for career advancement. What is it about Ireland that we have to endure an inept government system where cronyism dominates and the people appear to be hood-winked by self-serving bureaucrats who will do anything to save face, even denying that the IMF were in town and claiming the relative safety of a “soft-landing” or “cheapest bank bail-out in the world” a few years back? Whilst something radical may need to be done with the banks, while we’re at it something radical also needs to be done with this government system as it is clearly not working.

    It is all well and good writing articles and blogging though, the reality is that something more needs to be done. Why not form a political movement with the aim of reforming our government system, eradicating cronyism and parish-pump politics and replacing it with intelligent governance, a banking system that serves the people and a politics that appropriately serves our nation’s needs at the international, national and local levels? Idealistic thinking maybe, but it is better to work towards an inspiring vision than the grinding reality that Ireland finds itself in today.

    • Deco

      Michael, first rule about surviving in Ireland. It is not what you earn, it is what you save. Nobody told you that. Instead like all young Irish people who get assaulted with patronizing platitudes so that you turn the fruit of your sweat over to the gombeen rackets that infest this country. The Irish property market is the prime example. The local authority charges/rates on small business racket is another.

      Money represents sweat, not something to be triffled with. It can also be converted to political power. It also represents the potential to compete, or to direct economic activity to the competitors of the market riggers who undermine public decency in Ireland. If it costs me more, I avoid the toll roads, because of the corruption they fuel.

      Cronyism in Ireland is not just a small town problem. There was a lot of in Ballsbridge, and in Anglo HQ off St. Stephen’s Green. There is a lot of it in “D2″ (the Irish Civil Service), and also in the local autorities. It is basically influence overcoming economics, and in the process shoving the bill to some unknowing sucker. The intention of the process is that you will be willing and optimistic about becomming the sucker.

      Always question the price, of what you are being charged in Ireland.

  12. Deco

    Finally, in the Irish media, in the top selling newspaper of the land, we have an article on the real worth and prospects of Ireland’s serial offender at bad banking.

    Our advertising sponsors will probably be pulling the plug on the AIB advertising, where AIB are offering loans but have no money to loan, and looking for deposits for which they cannot afford even the most miserable of interest rates. Just watch the behaviour of the Old Schitzo on D’Oliers Street. Will the Irish Times give AIB or BoI such a hard time ? Daniel Day Pluck. Based on recent evidence, they won’t. Our advertising sponsors, again. We might even see Bullishly optimistic Dan writing articles about there being some grounds for optimism.

  13. uchrisn

    Change management is something which is a relatively new profession and growing.
    The 1 st rule of change management is that you can’t have real change by trying to adapt the old system slightly. You need to go back to basics and change everything radically. However that radical change might not be sudden, it may take longer than you think to get most people on board and implement properly. All of the people involved should have their opinions heard.

    Many people with no change management exposure
    would try to make radical change quickly and either be not listened to or ejected by the group they were trying to change. A key to change management is that the people themselves have to ‘own’ the change.

    There was a lady who tried to make correct obvious radical changes in Irish Athlectics quickly and she was treated terribly and ousted completly unfairly (vindicated by an out of court settlement). She had not got enough of her audience on board to challenge the powerful ‘dinosaurs’ who did not want to change and they ousted her.

    I think David and others have done reasonably well in communicating the message to the people about change in Irish political and financial systems. However it seems there needs to be more people out there who feel they ‘own’ those ideas.
    In change management they do this through workshops, using ‘subject experts’. Basically one knowligable representitive is chosen to represent a group at these workshops. Hundreds of these representitives meet at different workshops for their different areas. They firstly decide on something e.g a ‘vision’ for the change. Then the results they come up with are checked and changed by higher experts in that area. They may suggest some changes which are reapproved/changed by the ‘subject experts’ and sent back again. Then the subject experts design and build a new system together with the higher experts with the vision in mind. Finally the new system is deployed or communicated to everyone.

    The stages in effective change are – prepare, design, build and deploy. Irelands banking system and department of finance at the very least and perhaps our political system should go through this process.

    For example in The United Nations HQ they are doing this for their whole operations covering 50,000 staff.

    They decided they need radical changes in their ways of doing things, due to the increased human skills and technologies we now work with being used in an old system or processes.

    There was also poor management of human skills so many people with talents were being unused.

    I expect their idea/change management system may be copied by many governments looking to reform outdates public service processes/systems.

    • coldblow

      That’s interesting, but I don’t believe it’s mainly a management issue but more of a cultural one based in turn on a deep institutional imbalance. Ireland appears to be a country (a post capitalist colonial state to use Crotty’s description) with inbuilt privilege (= economic inefficiency), primarily based on free tenure of land but with a complex superstructure of public, semi-state and sheltered sectors, the political class, the financial class, and the legal and other professions, and comprising an intricate but durable network of cronyism, nepotism, privilege and sinecure stretching from the very top to the very bottom and controlling the livelihoods of the majority of the population. (IMHO) The Irish voter is, I believe, sensitive to his own economic self-interest (for good historical reasons) and the outcome of the last election was therefore quite predictable. Start to sort this out fairly and firmly and then it will become a managerial issue. But how can you start to sort it out when most people have a stake, however small, in the present system?

      • uchrisn

        Culture might be changed in an orgainisation by giving everyone an input in the change process, ‘helping’ them change their own mind and giving them the freedom to choose the correct path. Of course there are those that will never change their mind – but they might then be knocked into the minority.
        I was also wondering if this ‘ownership’ of change could be applied to reforming a political system. So maybe ‘town hall’ type meetings around (and outside) the country. It would need strong governance to make sure it stayed on track and was implemented. Perhaps the President, leading academics, economists etc.

        As you say you need people to stop acting in self interest. For example in the South of Italy you have the Mafia. The main reason they have not been kicked out is that many people feel the Mafia have helped them e.g. finding them a low paid job. They don’t see that kicking out the Mafia may be painful in the short term for them personally, but better in the medium/long term for the South of Italy.
        You could substitute Mafia for Real Estate Industry and South of Italy for Ireland.

        • uchrisn

          I should say Real Estate/Investment cartel rather than Real Estate Industry.

          • Deco

            In recent years it would have been more accurately defined as an imaginary or unreal estate investment cartel.

            You literally could not make it all up.

  14. uchrisn

    I should say I hope that this kind of change management system will be used in Ireland to reform systems and organisations, especially those under governement control. Just laying off loads of people suddenly is not fair. Those people may well have good talents etc. and just be a victim of being involved in a faulty system or managed badly. They certainly should have the oppurtunity to air their voice properly in any changes as it may be the system that needs to change radically.

    • coldblow

      As I’ve said before, I wonder if the efficiencies in the state make it bearable. You know, if it were efficient it would do even more damage.

  15. Deco

    Personally, I am far more concerned about the 2 Million taxpayers than the 2000 bank employees. 2000 people going on the dole is a disaster. But they will survive if the 2 million who are still in employment are able to pay the increasing welfare bill in this country. If the 2 Million cannot pay that bill, then all sorts of disaster will follow.

    The big picture is not too healthy. Of course, Ireland will eventually find a way towards solvency. The question arises “who will take the bill” for the damage.

    To answer this question I propose “capitalist consequences for capitalist failure”. Let the bondholders, and the bank shareholders take the bill. They were asleep on the job when they voted for the Sheehys, Bouchers and the Drumm&Drummers of the Irish corporate system.

    • According to Brian Hayes there is some big jobs initiative being introduced in May.

      • shtove

        Millions of people building dry stone walls in Connemara?

        • I was being facetious shtove.

          It would be ‘work’ and everyone would have a ‘job’.
          Work and jobs are the problem right? so rebuilding the dykes of Connemara would solve the work problem. There is never a shortage of work that needs doing

          Your reply is interesting because like me you clearly have no trust in our new tory government and the notion of a FG jobs initiative paints mental pictures of chain gangs working in the snow for free and being remunerated in bread and water.

          There are employers advertising on FAS for people to do skilled work for free and they are even stating that you need a degree for some of these ‘opportunities’. Only someone who is mentally deficient or has no self respect whatsoever would work for free … unless it was for a good cause

  16. irishminx

    http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?print=true

    Interesting article folks. I went to see Max Keiser last night, I enjoyed seeing him in reality. I also saw a film he did with David. Well done to all concerned.

  17. Gege Le Beau

    Irony?

    “Ahern shares his economic wisdom with Nigerians”

    BERTIE AHERN has taken to advising Nigerians on how they can avoid the mistakes made by Ireland and learn lessons from our woes.

    The register of TDs’ interests showed that he travelled to Nigeria in each of the past two years to deliver speeches organised through the Washington Speakers Bureau.

    His fees are listed in the highest band, “$40,001 and up”.

    http://www.irishtimes.com/newspaper/frontpage/2011/0414/1224294670725.html

    • ROFLMAO

      Well, he truly is in ‘good company’ in Nigeria, it would be a blessing if he decided to stay there.

    • Deco

      Let me see, Ahern is teaching people in Nigeria (consistently a world leader on the wrong side of the international index for corruption with Transparencey International).

      I presume he is teaching them the stuff about political corruption that have not yet discovered.

      Can Ahern just shut up and stop making an embarrassment of this country, everytime he opens his stupid mouth ?

      • dsuttle

        Why do I still see pictures of Ahern’s family showing up at events around Dublin, surely they are not allowed to feel comfortable?
        Our country is on its knees and our international reputation in shreds. 99% of people outside of this island do not care about whether we are getting a “bailout” or a punitive loan, all they know is that there are Irish fools on the receiving end.

        Time for Ahern and his _entire_ family to leave Ireland.

        p.s. Don’t forget to bring “de twins”, we want to avoid any accidental leakage into our future generations.

  18. MT25

    Could this apparant lack of rational thinking be a genuine tactic to force a fire sale of our state assets? What we can’t achieve with exports we could achieve by selling ESB, Coillte etc. Any toughts?

  19. Peter Atkinson

    Did anybody catch Richie Boucher on the radio this morning.During the Q&A he went silent.I reckon he was just confirming his baggage requirements on a Ryanair flight.I reckon he will have some amount of it to carry and I reckon he will have paid top dollar for the reservation as it will be probably be some time next month.A one way trip of course.

  20. Good article, but as well as burn bondholders, I’d have preferred D had spent out in rather more detail what he thinks we should do including what banks should be kept. For example,

    Max Keiser used the phrase Stockholm syndrome on VB last night, to describe our governments relationship with the banks.

    Def here: http://en.wikipedia.org/wiki/Stockholm_syndrome

    “In psychology, Stockholm syndrome is a term used to describe a paradoxical psychological phenomenon wherein hostages express adulation and have positive feelings towards their captors. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors as an act of kindness.[1][2] The FBI’s Hostage Barricade Database System shows that roughly 27% of victims show evidence of Stockholm syndrome.”

    I rather like to associate the ‘holm’ part with the Old Norse ‘holme’ meaning hill or island home, then we have ‘stock’, aha..Defenders of stocks and property.

    Simple really, the financial class who operate the big money in league with the banks, who previously
    got finance through the ECB, funnelled into the Irish banks, have figured out a way to still get finance funnelled through the ECB and into their pokes.

    Its the same trick as before but his time to their delight, this money is to be funded by Irish taxpayers.

    Because its funded by Irish taxpayers who are getting very cash strapped and concerned at all this pig in a poke stuff, they’ll now try to lure Irish taxpayers into accepting Nama loans to sell them ‘holmes’ at inflated prices.

    People like D and others tell them this is only a dead cat bounce and they’re ruining the place -turning a banking debt crisis into a sovereign debt crisis, but their snouts are too deeply set in the trough to hear them.

    The alternative to them of having no ECB or citizens on tap, their empty conjuring trick bubble to keep their property prices too high, is too terrible for them to contemplate….:)

    • For example above, close AIB, its just another Anglo, merge BOI and PTSB, create another national bank, run on similar lines to the Bank of North Dakota. Close the other banks using best models internationally for doing this, burden sharing. The state of AIB at the moment is no fit state for a ‘pillar bank’..Finally, end the Nama mess and pour its stuff back into the above banks while addressing the question, is it possible to turn around NAMA and make it into a Bank of North Dakota, a bank that could actually benefit this country?

    • Lenihan took approx €6bn out of the economy, next three years need to get deficit down to 3% with another approx €9 bn to come out of the economy.

      With the news of the ‘bailout’ plus the fact we’ve survived the slashing so far, we’ve a dead cat bounce, but even with our DCB IMF have cut our growth rate projections for next year to .5%.

      Even that doesn’t take into account ECB interest rate hikes, or other likely setbacks such as impact of Japan on global recession.

      So begins our dive to the bottom, our only response, stretch out those hands with the begging bowls to ‘our partners’ in the EMU.

      Fellow vassals, as we’ve already given up our sovereignty. perhaps its time to close the Dáil and hand the keys back to the Queeen?

      She might do a better job serving the needs of Irish people than either any of the Irish political parties, a better job than the ECB?

      Another and perhaps better option worth exploring is the 51st state option?

      Or auction and sell Ireland to China, whose government I’m sure listen and respond to the views of the people more than our lot do?

      Plenty of food for thought there:)

      • Deco

        Ireland has already been sold to the nEU empire. And the price was pretty cheap. A few bottles of booze for Ahern and Cowen sealed the deal.

  21. JuicyLucy

    What’s becoming clear is that if Ireland wants to be FREE again the Irish people are going to have to face reality that we have to go through something painful similar to Iceland to get our FREEDOM back. Just like people had to die in civil wars etc in the past to get their freedom. If we don’t tell the creditors to get lost we will be slaves again and get raped at every corner cause we never fight back. Right now the biggest problem is trying to save depositors deposits, I think we should let the banks go bust and if that means losing our life savings so be it, nothing in life is safe, not even your savings in the bank, but if we are FREE to start again things will be better for everybody. We’ve got to face the pain, all of it, no matter how ugly it gets, we’ve got to BITE THE HAND THAT FEEDS US cause right now that HAND IS RAPING US.

    • uchrisn

      I just made a comment above on the Mafia in the South of Italy. They may be the hand that feeds you if they get you a job but they are really cheating you in the big picture. Challenging to get people who are getting fed by them to realise that. Also challenging if you are going to wait for foreigners to kick them out for you. Foreigners will live with them as long as they don’t upset their economic interests. The Irish real estate cartel has been cheating the people of Ireland for years and they are cheating them out of millions more to keep the foreigners from getting upset.

  22. Peter Atkinson

    With the collective wisdom of the contributors here I will pose you a question and see exactly what you come back with.

    Scenario: A person avails of a generous severance package with the company they have served loyally for 29 years.The final figure they received equates to approximately the value of their mortgage which is quite large owing to equity release schemes.Here is the dilemma.In normal circumstances the wisdom would advise that they pay down, if not all, a large amount of this debt based on the fact that they now have no insurable income and their age would mitigate against securing employment in the near future.

    Fast forward to 2011 and this wisdom is gone out the window.Moral hazard, debt forgiveness and other very colorful terms are flying about.The net result is that they are wondering if they pay down a sizeable portion of this mortgage and any of the above become a reality they are left with a property worth possibly worth 50% of its current mortgaged value and absolutely no hope of raising any future funds based on their current circumstances yet their neighbours in insurable employment slip off the hook.

    I pose this scenario because I am sure their are quite a few individuals facing or about to face this conundrum both in the private sector and in the near future if Government/EU/IMF policy is implemented as planned the public sector.

    I would be very interested to see the various solutions to this situation.

    • JuicyLucy

      I think there are 2 options:

      1) Pay off the mortgage with the severance package which will mean the house is paid for and all you have to do is put food on the table and a little esb. (Live off a state pension with a paid off house.)

      It doesn’t matter whether the house is worth nothing as an ASSET because its still a roof over your head (eg. an old banger of a car that is worthless but gets you from A to B and is reliable is still worth something to the user.)

      2)Stop paying the mortgage and use the time given by the repossesion ban to save the mortgage repayments and take the severance package money with it and emigate with a wallet full of cash and start somewhere else. (This option is available to the younger Public sector workers.)

      The problem was caused when the person bought the house at a RIDICULOUS price, and you can’t go back in time.

      There might be DEBT FORGIVENESS, but it won’t be FREE. They might write down your debt by 30% but they’ll want a 30% equity stake in your house to reduce the debt by 30%. The home owner will always be the loser in any deal.

      In the past the public sector was the place to be, but in the future we’ll be more in line with europe, so if you can get out today with a wallet full of cash, i’d GET OUT and the younger you are the sooner you should leave the public sector to give you time to develop a new career.

    • uchrisn

      Peter, there are many variables here, the interest rate on your mortage, the amount of your mortage left to be paid relative to your house value etc.
      Saying that you could simply hedge your risk by using the money to make a bet (future/forward contract) on house values going down with someone.
      That way if your house value goes down more as many expect you will win from your bet and go back to even. If your house value goes up you lose the bet but gain in equity so even.
      There is a futures exchange for this on the Chicago Mercantile Exchange for house prices in certain regions in the states. It started in ’06 and has constantly been in backwardation i.e. more people are betting on home values falling. You’d probably find some trader in Ireland who would quote you a price.
      On another hand you can find an excellent course on finacial markets including long-term investing here http://oyc.yale.edu/economics/financial-markets/content/sessions/lecture09.html

      • adamabyss

        Very useful link ‘uchrisn’ thanks. I also enjoyed your piece on ‘change management’. Keep them coming. Adam.

        • Peter Atkinson

          Interesting reply and had the person been single would make a lot of sense but the gambling aspect in this climate with a family to provide for would preclude this option.They have 19 years left on the on a tracker mortgage with a rate of 2.95% (and rising by the looks of it).My advice was to deal with the present circumstances and act accordingly.From memory, with a wobble in prices from 1990-92 during the currency crisis (again defended by one Mr Bertie Ahearn) house prices have risen through the decades.Gradually in a lot of cases but nothing to the madness of the period 1998-2008.

          The problem here is that the bottom has not been reached and I don’t think this person can hang on for this to happen.Their point is, if debt forgiveness never becomes a runner they would opt for pay down.The example that was quoted to me on a lesser note was the taxi moratorium whereby any taxi over 10 years old had to be replaced.Off the taxi operator went borrowed the funds and then the mandarins decided to scrap the moratorium.I took this point on board.These political kamikazes are likely to pull any stunt now in desperation.

  23. wills

    David.

    My take on the article today is that it is a informational rendering on bubble economics 101.

    The insiders use bubble economics to transfer wealth,

    The stage we are at now would appear to be stage III of a IV stage series.

  24. wills

    Crew,

    I filmed 30 min video of Max Keiser kicking ass on stage last night in Dublin.

    http://www.youtube.com/user/BashStreetJailbreak

  25. Deco

    {
    At the same time, the budget deficit will have to be cut and this will cause further contraction in the domestic side of the economy. Hopefully exports can keep growing but as everyone knows these are not labour-intensive industries and buoyant exports, while welcome, won’t do much to dent the dole queues. Remember, unemployment has risen from 4pc in 2006/7 to 14pc now.
    }

    I think this is a correct observation. You can add the substantial numbers who are back in the education system as mature students. Something like 30% of the students in certain regional Institutes of Technology are now starting college over the age of 25. These people are trying to get into the multinational sector. This is good economic decision making. But the problem is that not everybody wants to do this.

    For this reason, I think that we should be prepared to drop the minimum wage, and go for a labour market that enables jobs at the lower end. There are already a lot of people working below the minimum wage as things stand. Especially small businesses where family members are involved.

    Simply put, the constraints on the labour market are acting as a contraint on economic activity and the production of goods and services. They are in effect dampening down demand. They are also increasing the cost base.

    It is deemed offensive to say what I am saying, but to be honest, this government does not understand the labour market. And this is a serious flaw. Because the entire NAMA plan hinges on a remedy of the labour market. So we need to put an end to the delusionary ideas that we can still afford certain things in this country, even if they make no economic sense.

    Richard Bruton’s commitment to keeping up the minimum wage misses the point. He should drop the minimum wage, and halve the charges of commercial rates. This will drive down the cost base in the retail sector. This might, assuming competition is occurring, drive down the cost of essential items for ordinary people.

    • If employers can’t afford the min wage then maybe they should learn to become more efficient or choose a more realistic business model.

    • Pedro Nunez

      +1, we need to promote employment, we can’t afford the hubris and delusional grandiosity of having the 2nd highest minimum wage in Europe, when we’re bust, WTF is this country on?

      • MjHi

        Oh how I agree with you.I sit at home & watch these people make these populist decisions & I think nothing has changed.I’m going abroad to invest in companies with lower wages costs better & cheaper services less bs.I give up the IMF run this country & I think these politicians, all of them, are going around headless. WTF are they thinking.

  26. Deco

    The ponzi business has not ended.

    Now we have a bailed out Anglo bailing out Quinn Insurance.

    We also have certain continental insurance companies holding bonds to anglo Irish bank, being bailed out by Anglo.

    Anglo – the sugardaddy of Bailout candy.

    Now, so as to prepare for your Leaving Cert Economics exam, 2011. Ardteistemearacht 2011.

    Q. “What is the business plan for Anglo Irish Bank ?”,

    A. “Anglo Irish Bank is in the business of issuing and providing bailouts to companies in the Insurance sector”.

    Yes, Anglo is in the bailout business. Here is the evidence.

    http://www.rte.ie/news/2011/0414/quinn-business.html

    http://www.politics.ie/economy/140523-anglo-irish-bank-bondholders-revealed.html

    Now, I ask can any of you find any evidence to prove that Anglo in reality has any other business plan. I don’t want the official story, because that is only designed to placate and deceive the taxpayers.

  27. ‘DO you find it strange that as a result of reckless lending …….’

    That is an understatement.

  28. JuicyLucy

    People forget that the unemployment rate is actually 20-25% not 14%.

    If you remember that most of the people going back to college or staying in college are only doing 1 or 2 year add on courses like Masters degrees etc. So when these people finish up in a year or 2 and still can’t find work they will be joining the folks on the dole. What……are they going to keep staying in college? If we default in 2013, with all these people still out of PAID work (not work experiance jobs) Fina Gael is toast.

    • Deco

      Well, obviously you have not read the Five Point Plan. There is a specific plan to get people off the dole into work.

      (eh, having fun of course with one of Kenny’s election pronmises). You are right. I reckon we are liable to see more FAS type schemes. some of them might be useful. But there is a danger that these schemes will be driven by political objectives – i.e. to sound impressive.

      The labour market is not adjusting, and it needs to be allowed to adjust, so that employment picks up. Best of luck to those in college. They will have it difficult. And we can all do our bit by helping people who are mature and how qualify with third level qualifications, and who join the workforce to become a success.

  29. PMC

    I’m not so sure about dropping the minimum wage any further. If the minimum wage were to go down to say EUR 7.65, this would to equate to around EUR 290 per week.

    A double room in a shared house in Dublin costs approx 400 to 600 per month.
    There is something seriously wrong when a person working full-time has to save every cent for 1.5 to 2 weeks just for a room in a SHARED house.

    How does that person ever get a chance in life?

    That person would have absolutely no opportunity to save any of their money whatsoever, and would be living a frugal life when bills and food are added on.

    The problem here is the chasm that exists in terms of wages. The head of NAMA is on EUR 500,000, the head of the shambolic HSE is on circa 330,000; someone on the minimum wage engaging in soul destroying work having to listen to some stressball Irish manager is on around EUR 15,000.

    Now the average industrial wage is EUR 32,000.
    This is still double what the minimum wager is on, therefore the prices on retail goods will not come down much more from where they stand at present because of the industrial average.

    It is for this reason that the country is absolutely f*cked.
    During the Ponzi Years, every aspect of the economy became so delicately balanced and interlinked. This was fine of course when all and sundry were brown nosing each other and the house of cards could be held together via manipulation and skullduggery.

    Now however, people are up to their necks in car loans, holiday loans, visa cards, mortgages etc… so the current wage levels have to remain to keep the whole thing together.

    These pricks won’t touch the commercial rates, because it’s the outragious rates that keep fat, ill-informed toads sitting at their desks picking up a wage-packet at the end of the month.
    It’s all about maintaining the status quo – Look at the amount of retailers who are now taking landlords to court over the rents. Some of them are getting 50% reductions, and rightly so.

    This is another reason why they’re so desperate to kepp the 12.5% corp tax.
    If the MNCs left, can you imagine how much the average industrial wage would fall!
    If that were to happen, the banks would be writing a lot more than mortgage debts off.
    They’d be writing loans for holidays to Magaluf off also.

    • Praetorian

      @PMC – Valid points, well put.

      The squeeze is on with one survey revealing people have virtually nothing at the end of the month after rent/mortgage/car loan/utilities have been paid off, and the government is thinking of increasing taxes???

      Cash is king in this period, and yes, there is not an inconsiderate amount of people who are not impacted by the recession, including politicians on astronomical sums. Fianna Fail should never be forgiven for cutting the minimum wage, one last insult to working people, a final ignoble parting shot (Cowen’s pension alone is going to cost many millions of euro while the silence from the current government on what the previous government was up to is deafening), they seem more obsessed with the dress code in the Dail judging by a report in the Irish Times while the economy is in a downward spiral without end it seems. Perfect illustration of a dangerously out-of-touch elite.

  30. Alan42

    NAMA is now offering mortgages ? What next ? Credit cards ? overdrafts ? Buy one get a whole estate free ?

    At least call it by its correct name . National Liability Management Agencey .

    I did accountancy at school . I was hopeless at it as I could never get the books to balance . Little did I know that there was such things as a SPV or even off balance sheet . If I had of known about either a SPV or off balance sheet accounting I could have hidden my errors in there and I would have got a A instead of a D .

  31. May I suggest to all posters that the name of that property warzone organisation you keep refering to makes much more sense if you call it;

    VIET-NAMA

    May I also say that there’s nothing wrong with it’s boardroom that a little napalm couldn’t sort out!

    • I must have mixed that up, I thought the Bert might have been the one who suggested the name over a beer one night, inspired by the NIGERIAN AIRSPACE MANAGEMENT AGENCY

      http://www.nama.gov.ng/

      • Deco

        :)
        Good one, Georg, Good one.

        Ahern cannot manage the space between his ears, except to drain it with booze every often and “make the space, spacier”.

    • Deco

      Yes.
      Policy quagmire. Sucks in resources. With some LBJ type figure driving us into it deeper and deeper. Driving us nuts. Trying to rectify the damage done by an enemy with the nickname of Charlie (as in all the coke that the professional set were snorting at the height of the boom, which was influencing their irrational stupid behaviour). Yeah Charlie caused havoc.

      And then there was the other Charlie. The Squire. Charvet shirt Charlie. The Irish Mitterand.

      The eras of Free Ireland are three.
      i) Before Charlie influenced matters.
      ii) Charlie influencing matters (including his side kick from Drumcondra).
      iii) Cleaning up the mess after Charlie influenced matters.

      Viet-Nama. Charlie. Quagmire. Authority failure.

  32. BnB

    Much has been made of the thousands of bank jobs that are being lost, but these make up only a small fraction of the numbers employed by Irish banks. The truth is that none of the jobs should even exist, because none of the Irish banks should exist. The banks should have been allowed to die a natural death just like any failed business that can only survive by putting a burden on the rest of society. Anglo should have died immediately, followed by the other banks within a year.

    The customers (savers and borrowers) of the Irish banks could have transferred to any foreign banks that wanted to cannibalise the profitable parts. Some of the bank workers could have transferred their jobs as well, but not very many.

    Ireland does not have its own home-grown industries in making cars or mobile phones, even though almost everyone uses those products. So why should it have its own banking industry to provide financial products, especially when its banks turned out to be such a spectacular failure? The European banks could have chosen to move into Ireland to compete with them when the Euro was introduced but they decided instead to avoid taking the risk of lending directly for Irish property. It was easier for them to profit from other people’s property speculation by buying bank bonds.

    Admittedly I’m saying this two and a half years too late and with the benefit of hindsight, but there should have been no guarantee for the banks apart from the limited guarantee on deposits that was already there. Even if there had been a run on the banks and some depositors had lost some of their savings, the cost to Ireland would not have come close to the bill of more than seventy billion Euro to the Irish state.

    • Colin

      “The banks should have been allowed to die a natural death just like any failed business that can only survive by putting a burden on the rest of society. Anglo should have died immediately, followed by the other banks within a year.”

      Excellent post BnB. No one has a divine right to paid employment. A job for life is rubbish. Its people who do have a job for life who slack off in everything they do because there’s no penalty for poor work performance. We know these people, some of them taught us in school, some work as receptionists in safe employment like medical facilities, they’re everywhere. Look at the priesthood – jobs for life = perverted individuals.

      What I fault David with is his obsession with 2,000 bank workers losing their jobs. What about the 200,000 who have lost their jobs in construction? These men who lost their jobs can’t cope as well with the new situation as women, who incidentally make up a much higher percentage of employees in banks. The country is still underdeveloped in infrastructure. Cork to Limerick road is a disgrace. Roads around Rosslare are embarrassingly poor. Water mains are in awful condition. Electric grid is unfit for purpose. Railways are deliberately been run into the ground.

  33. On the day Ireland is downgraded to optimistic junk status:

    http://on.wsj.com/gU6ZzB

    Perhaps a reflection on the nature of propaganda:

    http://bit.ly/17JalT

    “Squealer: Squealer is an intriguing character in Orwell’s Animal Farm. He’s first described as a manipulator and persuader. Orwell narrates, “He could turn black into white.” Many critics correlate Squealer with the Pravda, the Russian
    newspaper of the 1930s. Propaganda was a key to many publications, and since there was no television or radio, the newspaper was the primary source of media information. So the monopoly of the Pravda was seized by Stalin and his new Bolshevik regime. In Animal Farm, Squealer, like the newspaper, is the link between Napoleon and other animals. When Squealer masks the evil intentions of the pigs, the intentions can be carried out with little resistance and without political disarray. Squealer is also thought by some to represent
    Goebbels, who was the minister of propaganda for Germany. This would seem inconsistent with Orwell’s satire, however, which was supposed to metaphor
    characters in Russia.”

    Socialism for the banks…??

  34. Colin

    Next time you hear someone preach that there’s no market for selling property these days, simply interrupt them and say, hold on, wait a second, news just coming in…. yes, in fact there is a market.

    http://www.auction.co.uk/irish/resultslive.asp

    Check it out! There are buyers out there! Who’d have thought it! They must have appeared out of thin air! Holy Moly! There IS a market! And the reserves are around €35,000.

    • Praetorian

      The more collapse edges closer the more efforts will be made to give the appearence of ‘business as usual’.

      NAMA efforts to flog property is just the beginning, the entire ‘market’ may go the same way given current economic conditions, this recession is beginning to eat in deeper.

      Sit back, wait and watch, no doubt government is working on new ways of sucking money out of people, they will push it as hard as they can but they are playing a mugs game, sooner they default the faster Ireland will be able to recover, but first they are going to try the well a few more times.

  35. Alf

    George Orwell was right.

    Latest Newspeak: Banks are charties.

    The taxpayer owes the bank bondholders for their existence. That’s On top of the banking, mortgage and loan charges they extort from you. Can you feel the love?

    A wise man once said – If you can’t beat them join ‘em. So here is an idea…

    Everyone start your own bank, lend to your friends (or even yourself), and declare the debts to be bad. Then post a massive loss and write off the ‘uncollectable’ loans.

    The state will cover the loss as they they can’t allow a bank default.

    How long do you think it would take for them to realise that something is up?

  36. Tim

    Folks, look at this: Deco’s “Ernst and Dung” seek injunctive relief in the High Court from investigation into its audit of ANGLO:

    http://www.rte.ie/aertel/110-01.html

    Not reported on RTE news.

  37. Malcolm McClure

    Tim: Well caught. But the link is broken for me.
    Try
    http://www.rte.ie/news/2011/0415/anglo.html

    These are the guys who bear heavy responsibility for our travails. If auditors had published the truth about Anglo before Lehman went down, the collapse of the Irish house of cards might have been prevented. They were paid princely sums presumably to sweep the s**t under the carpet.
    Let’s hope Judge Kearns allows the Chartered Accountants Regulatory Board’s posse to bing back their quarry, dead or alive.

    • Tim

      Malcolm McClure I agree.

      • Malcolm – this is Tetronic to the whole debacle.If we miss this it was all a set up by the Mafia .

        Should ACA Institute have caused failure in the commencement of this investigation due to a deception of process then who have we left to catch the Rats

    • There’s ongoing Garda full scale fraud inquiry surrounding this, to what extent the ICB, or even the ECB were culpable, may have to be determined in the courts. There is also the matter of the involvement of the ECB regulatory system re the Scheisters in passing the bill to taxpayers. The ECB I believe in 2006 gave a heads up to the Irish banking system. It has made claims of warnings given, see Colm McCarthy, Indo today. Nobody got wrapped on the knuckles, no lending to Anglo was withdrawn or curtailed in any way. Yet the ECB wants us to take national responsibility of our ICB involvement even though it too was responsible through policing of the Stability Pact? ECB turned a blind eye to its own guidelines in the same way Germany and France ignored these guidelines in earlier years.

      Our gombeen puppets are celebrating instead the ridiculous ‘D’ pass Chopra and Troika have given us. Markets know this is a sham and a cod.

      Our gang of Orwell Squealer Haw Haw (:)) cheerleaders on Pravda RTE and elsewhere know the bailouts are crucifying this country and are colluding in the coverup through a mixture of incompetence, ignorance or profiteering.

      Better to laugh, the alternative is worse.

    • They ‘alternatively’ want access to the findings before they are published, ..sounds very sleazy, why? Perhaps to challenge the findings and lock them up in court forever, or force the findings to be retracted?

      Lets make this simple.

      Let’s publish the auditor reports Of E & D and maybe consider mounting a €100 bn lawsuit against them if we find any irregularities in them….As the biggest loser bank in history, surely E & D wern’t giving them the heads up!

    • coldblow

      Seanie was (still is?) a member of the Council of the Institute of Chartered Accountants in Ireland.

      http://investing.businessweek.com/businessweek/research/stocks/private/person.asp?personId=8302078&privcapId=878951

  38. macroscian

    I can see a great opportunity for opening a guillotine manufacturing facility

  39. wills

    The private banks are coupon dealerships.

    Their technicians know this so suffer no moral compulsion.

    Confidence is the key variable.

  40. wills _ your lucidity makes it all so simple to understand .

  41. Pedro Nunez

    THE TRUTH ABOUT TRUTH is elusive;
    Is philosophy merely delusive?
    What seems rubbish to you May be, for me true,
    Which leaves everything inconclusive.

    The Golden Rule or ethic of reciprocity is a maxim,[1] ethical code, or morality[2] that essentially states either of the following:

    One should treat others as one would like others to treat oneself (positive form
    One should not treat others in ways that one would not like to be treated (negative/prohibitive form, also called the Silver Rule)
    The Golden Rule is arguably the most essential basis for the modern concept of human rights, in which each individual has a right to just treatment, and a reciprocal responsibility to ensure justice for others.A key element of the Golden Rule is that a person attempting to live by this rule treats all people with consideration, not just members of his or her in-group. The Golden Rule has its roots in a wide range of world cultures, and is a standard which different cultures use to resolve conflicts.

    But as GB Shaw said, “the golden rule is that there are no golden rules”.
    Shaw suggested an alternative rule: “Do not do unto others as you would that they should do unto you. Their tastes may not be the same”
    (Maxims for Revolutionists; 1903).

  42. Moon WOBBLE Prediction

    June 7th to peak at June 14th -15th

    SEVEN SEVEN SEVEN ……………..B-Ready

  43. More lies from Enda this morning, same old lies you heard from the other crowd, there has been ” a positive response internationally ” to our position on the banks.

    I presume he means the decision not to burn bondholders, which led to Moody’s reducing our ratings to one notch above junk!

    In the topsy turvy world of black is white, perhaps we should reflect on the bondholders protected by Enda,(see list of bondholders in link below)eg RothsChild and Goldman Sachs. RothsChild own the IMF and Goldman Sachs (suds) provide advice to the Irish government on managing our meltdown.

    http://www.abovetopsecret.com/forum/thread451439/pg1

    nb
    “http://www.politicalworld.org/archive/index.php/t-3395.html”

    See above the offshore Anglo cesspool Ansbacher Bankers route used by Haughey and we remember the scandal of offshore account tax dodging and other Ansbacher accounts.

    Also from above:

    “Kathleen Barrington strikes again:

    €600m Anglo deposits that got away
    16 January 2011 By Kathleen Barrington

    Brian Cowen should explain why Anglo Irish Bank was allowed to sell a €600 million Austrian deposit book to a Swiss bank, at a time in 2008 when he knew that Anglo Irish Bank was in dire need of deposits.”

    also………..

    “And Kathleen Barrington strikes yet again :)

    Lenihan silent on issue of Anglo’s Austrian depositors 23 January 2011 By Kathleen Barrington

    Minister for Finance Brian Lenihan has refused to provide assurances that none of the owners of €600 million-worth of deposits held in Anglo Irish Bank’s former Austrian subsidiary owes money to the nationalised bank.

    Lenihan said a bank could not disclose information about its customers, as this data was protected by client confidentiality. Anglo Irish Bank announced the sale of its Austrian subsidiary to Swiss bank Valartis on September 5, 2008.

    The announcement did not disclose that the deposit book contained €600 million of deposits, a matter which was subsequently disclosed in a little noticed note in Anglo’s 2009 accounts.

    It has since emerged that Anglo was pleading with Taoiseach Brian Cowen as far back as April 2008 that it was in dire need of deposits.

    The bank also sought to artificially boost its balance sheet at its 2008 yearend to give the impression it was retaining deposits, even though it is now known that deposits were by then haemorrhaging out of the bank.”

    __________________”Last week, Anglo declined to provide assurances that none of the owners of the deposits owed the bank money. The bank cited client confidentiality.

    http://www.thepost.ie/themarket/lenihan-silent-on-issue-of-anglos-austrian-depositors-54050.html

    We had the helicoptering out of deposits under the shadow of Anglo’s imminent collapse.

    Note all the above revelations are internet based and not the subject of open, transparent public inquiry.

    The criminality involved above is being shored up and supported by Enda The Hypocrite, who led us to believe all this would be investigated and the truth laid before the Irish people.

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