June 22, 2011

ECB is happy to let Irish banks go bust by stealth

Posted in Irish Independent · 159 comments ·
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Did you know that AIB defaulted on Monday? It did, and the people who internationally govern this type of thing announced yesterday that AIB is technically in default. AIB decided — rightly — not to pay some of its many billions of bonds. It began the process of burning the bondholders. Now, were we not told that if the banks defaulted then the sky would fall in? Wasn’t that the establishment line?
It’s not me who says AIB has defaulted, it is the following list of banks: Bank of America/Merrill Lynch; Barclays, Credit Suisse; Deutsche Bank; AG Goldman Sachs; JPMorgan Chase Bank; NA Morgan Stanley; UBS; BNP Paribas; Societe Generale; Citadel Investment Group LLC; DE Shaw Group; BlackRock; BlueMountain Capital and Rabobank International.
All these international investment banks that make up an august body called the International Swaps and Derivatives Association deemed officially that AIB has defaulted.
Now I don’t really care what happens to these bankers, but I do remember that they had said that if AIB or any of the Irish banks defaulted on anything, the world would cave in. So has it? Weren’t you told that by now the ATMs would not have any money in them?
Yesterday morning, I approached an ATM in Dalkey at the local AIB expecting to see lines and lines of frantic depositor’s queuing up to get their money out.
I was terrified as I put in my card because these usual suspects who come on telly and sound as if they know something warned that at the first hint of a default there would be no money in the hole in the wall. Now granted, these were the same lads who said we’d have a soft landing and who reassured us that the banks were “well capitalised”.
But let’s cut them some slack, people make mistakes; surely they were right this time about a bank default and the ATMs? They wouldn’t just be making it up and scaring people again, would they? Surely they couldn’t be talking through their posteriors one more time? Have they no shame?
But lo and behold, the money came out of the machine as it has always done. So AIB defaulted the day before and nothing actually happened. Nothing at all changed. Surely the bankers are not codding us again? If they are, more fool us!
It is beginning to look like that. For example, think about what happened last week. Michael Noonan — for the first time from an Irish Finance Minister — said that he would burn the senior bondholders of Anglo and Irish Nationwide. We had been told that the slightest hint of burning the “senior” bondholders — the holy of holies in the strict hierarchy of creditors — would signal financial Armageddon. But guess what? Nothing happened!
So here we have the Finance Minister of a wobbly eurozone member country saying he will default on senior bondholders and nothing happens. Isn’t this a complete reversal of the original Department of Finance/ banking establishment view?
Why do we continue to listen to those who warn that the default on bank bonds — particularly ones that have been guaranteed like those of Anglo and INBS — would lead to chaos?
How much more evidence do we need before we conclude that the Irish financial establishment, like the Bourbons, has “learned nothing and forgotten nothing”? And like any crumbling orthodoxy the establishment deploys tactics such as fear and scaremongering rather than logic to bolster its out-dated position.
Let’s get something straight at this stage because we are obviously now going into the “defaulting” stage of this financial cycle. The only way the ATMs would run out of money is if the ECB decided to break the Irish banking system. But with nothing to replace it, the ECB won’t take such a step.
So the only way the Irish ATMs would stop functioning is if the Irish Central Bank, acting as the ECB’s vassal in Ireland, decided to prompt financial panic by refusing to exchange Irish bank assets for money.
Just so you know, the way a stylised banking system works is a follows: The bank lends you money, let’s say €300,000 to buy a house. This is an “asset” to the bank because it generates interest on the loan from you and thus generates income. The more of these loans the bank makes, the more profit it makes.
It has therefore in its vaults a promise from you that you will pay it. As long as you redeem this promise, this is “as good as money”. The bank then goes with this promise from you, commonly known as a mortgage, to the Central Bank, it hands in this mortgage and in return, the Central Bank gives the bank real cash for which the banks pays a small amount of interest. It then puts this cash in the ATM and lends it to you at a higher rate of interest.
So in order for there to be no money in the ATMs as the scaremongers claim, the ECB has to have the balls to react to a bank default on bondholders by breaking this crucial banking circle.
This would mean the ECB refusing to give the bank money or refusing to let the Irish Central Bank give the retail bank money at the discount window.
Now in normal times it should do this because the Central Bank has no business giving more money to a bank that can’t pay its debts to its creditors. Because if it does this it would be propping up a bank that is bankrupt and there is no way to distinguish between banks that are good and banks that are bad if the Central Bank doesn’t do that basic job. But these are not normal times.
As a consequence yesterday, faced with a default by AIB, the ECB did nothing. Following Mr Noonan’s threat to burn the senior bondholders, did the ECB cut off the Irish banks from the repo market? No it didn’t. Did the market sell off Irish government bonds in the wake of Mr Noonan’s musings? No it didn’t. Why?
Because the market already knows that the Irish banks are bust. The market knows that they have become re-cycling vehicles for the Irish Government, which is simply upholding the ECB’s will that an Irish bank doesn’t declare itself bust, because that would look bad for the euro. So the ECB is now allowing the Irish banks to go bust by stealth rather than by diktat.
They won’t cut off cash at the ATMs because they don’t have the balls to do it. And therefore, we are condemned to a decade of zombie banks, breastfeeding a zombie economy. That is what this means for you.
Far better, to bring this nonsense to a head and give us some hope in the future. The way to do this is to introduce new licences, kill the old banks and allow new ones to come in, unencumbered by the last 10 years.
You can’t have a recovery without a banking system and you can’t have a banking system which is bust and limps along from one crisis to another.
The Irish banks will now begin to default bit by bit and Irish depositors will wake up to this and react by doing what the ECB doesn’t have the courage to do — they might just continue to take their money out. Now that would be a real crisis.


  1. adamabyss

    Nah tell ahwe wah fu do!

    • NO HOPE

      “we are condemned to a decade of zombie banks, breastfeeding a zombie economy” – Correction – 20 years David. 20 long yrs not ten. This economy has no hope of revival unless there is radical policy change now. All the flim flam of the politicians trying to put bells and whistles on everything for their EU overlords and wasting time like they have for the past 3 years has resulted in an economy that cannot revive under the current regime. Knocking off 50 k here or there on a few overpaid state sector workers won`t do it at all. That is only so the electorate to feel better about the new regime. We have an inverted pyramid Ponzi scheme of quangos that is so top heavy we are almost falling over. 200k cap is not enough. We need to immediately tear up Croke Park agreement, get rid of 30 000 public sector workers and create a more favourable tax base for multinationals.
      We cannot pay back twice what Germany did after Treaty of Versailles. They took 92 years to pay back half what we owe. That`s the German economy as opposed to ours???????

      • molly66

        well where do i start this goverment is asleep or in a coma things are getting worse every week and the hundred days of hitting the ground running is a joke.we want to why would anybody in his right mind would employ a man when you add up all the costs to keep a firm legal.the prices that most services firms are getting is only barley cost price.you can not pay holiday pay -bank holiday-sick pay or redundancy pay on the prices that are been worked since 2008.the same woman that wants a job done in her house for half nothing-cannot complain when her son is let go and the firm can not pay the money due in redundancy payments.!the next time you are walking your dog have a look at the cars in the driveways-if you see 2010d/2011d cars you can be sure there is a retired civil servant or a government worker in that house. if you where to add up all the money payed in income tax in any medium size housing estate for one year ,you would probably only pay the pension for one high ranking politician.someone should do a calculation for their estate and rename it after the retired local politician(because they are paying his pension) i have a friend who could take on two people tomorrow but because he was so stung by keeping on two employes and only getting the bare cost of the work-that he lost any money saved durning the past 20 years in paying them ,when he should have let them go as soon as the slump came and then had to burrow to pay there redundancy.it does not take a genius to see that paying and molly codding of some workers has to stop if we want to get this country back on its feet.

      • Deco

        It is not so much the German economy compared to ours, as the Germany method of getting things done compared to ours.

        FAS, The National Conference Centre, The Bertie Bowl, The Port Tunnel, The Luuu-ehss, etc…

        We are a disorganized chaotic corrupt bunch, and we need to sort our stupid selves and drop the arrogance.

        Immediately !!!

  2. John Q. Public

    So why don’t bondholders just call it a day if they know we can’t repay them? What are they holding out for? Why don’t the ECB pay off all the bondholders and shift the EU debt onto itself then take a haircut? Surely this would stabilise things.

  3. fitzpatrick

    If you take your money out of Irish Banks, where do you put it?

    • molly66

      you use uk banks, this government is asleep or in a coma ,remember the film coma the hosiptal was putting people into a coma ,so they could steel there organs the ecb and the eu are killing this country with our puppet government.

  4. LeGrandeFromage

    Its depressing how slowly change in any sector in Ireland takes place. There are some great ideas out there and a real energy to see these changes implemented. I have a horrible feeling we, as a country, are going to waste yet another opportunity to take action and instead seek to maintain what will never work and waste ever more economic and social resources with petty soultions rather than having the balls to make a break with the old mind-set and really grasp the moment: designing a future we can all be proud of.

  5. Malcolm McClure

    Shuuuussh. We are all going bust by stealth. Bit by bit Irish depositors will wake up to this and react by doing what the ECB doesn’t have the courage to do – take their money out.
    Guilty looks from the queue at the ATM. Shuuuush. Tupperware buried in the garden Shuuuussh. Doesn’t show up on a metal detector.
    Frequent trips to cousins in the North. Shuuuussh. Exchange euro for £,$, Swf and Nk.
    Install large fuel tank in garden. Shuuuush. The petrol’s for me lawn-mower.
    Buy up large cartons of comestibles to store in attic. Shuuuush. Me cousins are coming to visit.
    Invest in several 125cc motor bikes. Shuuuush. I’m practising for the NW200.

    I’m sure there will be many more stealth stories before this is all over, but don’t be one of the foolish virgins.

  6. CitizenWhy

    The consensus among big banks, their managers, their bondholders and their governments is that the big banks cannot possibly succeed in a free market system (at least when managed by bankers), and therefore must be shielded from default and liquidation. But they allow the banks to continue to make a yearly “profit,” and they continue to let the banks pay large salaries and bonuses to their “valued” managers (who are actually responsible for their mis-management).

    Te executives at the big banks are ion reality highly paid and overly compensated civil servants who have, at the same time, enormous political power as “advisers” to heads of government and legislators.

  7. wills

    My GOD!!

    Article is actually not a metaphor it is real.

    Further down the *rabbit hole* we all do go.

    Logic and reasoning is now bendable, twistable and putty like.

    The financial industry including the private banks are running a con on the public.

    The movie *the Sting* comes to mind.

    The Casino out front of shop is fake.

    Their is a hidden syndicate system behind the Casino operating a double con.

    The difference though, the dudes running the double con in the Sting where out to get a real bastard gangsta and take em down.

    In the real world tis the average Joe taxpayer been taking to the cleaners.

  8. Deco

    {
    Did you know that AIB defaulted on Monday?
    }

    Nope. Never knew. Sitting here in the Valley of the Clueless in front of a TV set, waiting for Pravda News to tell me that there might be something amiss in AIB.

    And Pravda have ads telling me that AIB is loaning loads of money to Irish business.

    Not a word from AIB ex-Chairmen Suds, Dermot “eggs” Gleeson or Lochlainn “Rusniak affair” Quinn.

    • I know you don’t take the Irish media seriously Deco because your post is heavy in irony and not without a smattering of black humour

      I stopped watching PRAVDA/RTE, Vinnie Browne, Frontline and the rest after the election and and my mood has improved a lot since. I knew the negative effects of listening to such garbage and am certain that is bad for our health to take it seriously. For this reason every time you mention these organisations it is irrelevant to me. This is the circus yet many supposedly intelligent people continue to tune in and give them an excuse to exist

      By switching off the box for a month there is a very good chance that you will feel better in time and not wish to return to old habits

      You have warned the unenlightened in this forum many times about the dangers of falling back into the old Irish mindsets which hold this country back

      There is constant need in this country for constant gossip, rumour, innuendo and speculation most of which never materialises. You would never get to the bottom of it even with a very long spoon and it is a waste of your excellent intellect to be letting RTE get to you

      As DMcW hints we have not seen anything yet and in time it will turn out to be the case that RTE will be the least of our worries

      • Deco

        We live in a world of saturation levels of “InfoTainment”. The truth is absent, and deceit is present in overwhelming quantity. This is how money controls controls a democracy.

        The real problem is that there is very little information of any real quality. It is the McDonald’s approach to informing the public – stuff them with loads of the same trash. It results in the intellectual equivalent of obesity.

  9. gizzy

    Submitted a detailed business plan for a new business bank over two years ago to Fianna Fail at a fraction of a fraction of the cost of capital injected to date. Was told Nama would sort it out.
    Submitted one to Fine Gael before the election. Was told firstly that the EBS under new ownership was the solution. Was then told when that deal fell apart that the two PILLAR BANKS (Pillar must mean fubar somewhere) would provide the solution.
    The new bank solution is so capital efficient and could attract funding because it would not have a legacy loan book.
    I think newbank now would make the gobshites who promoted Nama and now pillar banks look exactly what they are, clueless dinosaurs.

    • Deco

      Neither “Pillar” Bank is a Pillar. Another case of Official Ireland designating terms expressing confidence in entities that express incompetence.

      NAMA – invented because the Irish establishment came to the realization that in order to deal with a property crash that officially was not underway, that Ireland needed “a bad bank”.

      Ireland never needed a bad bank. They are all bad banks. We needed a good bank. It has now reached the stage that everybody is “insourcing” their own banking, doing their own saving and preparing for what is to come.

      And one of the things that is to come is working 40 hour weeks at the ripe old age of 67, so that you can marginal tax at 52% to bail out the elite, and the avail of a HSE which is a pile of disorganzed mess.

      Ireland – organized in such a manner as to make sure that failure is inevitable. And proud as punch about the state of that disorganization.

  10. ladygee2

    “What goes around comes around”. So much for the scaremongerers who kept on telling us that if there was any kind of a default in this country that the ATM’s would stop working!!! It’s true what you said right from the outset, David, about the ‘insiders’being protected by incompetents. I wouldn’t trust AIB or BoI as far as I’d throw them. They’re nothing but a complete and utter shower of wasters!!! So much for the so called “Pillar Banks”? They simply haven’t got a clue!!! And neither have our so called new government.
    Did anyone hear that idiot of a Minister for Transport, Leo Varadkar ,telling us today that it’s only inevitable that cost of rail travel has to go up!!! Has the man completely ‘lost his marbles’ altogether? It certainly sounds as though he has!!! The cost of rail travel should be coming down, not going up!!! Those idiots in CIE haven’t got a clue how to run a company properly and that’s the main reason as to why CIE is in such a mess and will continue to be in such a mess because of the crowd that’s running it!!!
    This country has simply ‘gone to the dogs’ and if it continues to be run in the way that has for the last how many yars then I can tell you now that it’s time to get out of here!!!

    • Deco

      Unbelievable stuff.
      Varadkhar actually takes the view that he understands more about business than the rest of the Dail. And that he has more common sense. Except this is common nonsense.
      This is not just Varadkhar’s view. This has always been Irish Rail’s view. There are too many people using the trains – and the muppets in CIE being as badly organized as they are, are unable to deal with this at an operational level.

      Therefore the “solution” is to increase prices so as to get people to get to stop using the trains.

      This is absolute nonsense !!

    • I’ve already left. Dont just talk about it. Do it. “Let the dead, bury the dead ”
      I’ll be back when the dead wood has rotted way.

  11. Good article which cuts to the chase and speaks plain English. Interesting that you are forecasting a real crisis at a time when the two government parties have risen in the opinion polls

    Is this a national closing of the ranks around the green jersey you wonder but previous behaviour predicts not as this is a very very divided nation where politicians and vested interests would argue over the colour of the sky

    DMcW has been telling us for years the scaremongers were wrong in warning us that the ATMs would stop working. 90% of the things we worry about never come to pass and there is no place in the world for the scaremongers

  12. real terms

    David, on new licences, genuine new choices in banking for customers would be welcome throughout Europe. The fractious, protected EU banking market has been a serious let down for ordinary Europeans generally, not just in Ireland. Weren’t people in any EU country supposed to be able to open accounts in any bank in the EU, as residents of the EU? Whatever happened to that union goal?

    • http://www.goldmoney.com

      you can open an account there but shhhhhh!!!

      You can place your money into gold/silver/platinum or swiss francs and have it held in your choice of london, zurich or hong kong….all hopefully safe beyond the euro’s reach.

    • uchrisn

      Basically because of the different supervision, tax, accounting practices, language, culture, customer protection laws, it is expensive for a reatil bank to set up in different countries. Ireland being a small market you can imagine why it might not be worth the while of eu banks to go though all that to set up here. Anyway slowly the Eu commission is working on integrating that kind of stuff.
      On a side note, as markets become more integrated and competition becomes stiffer you usually have a smaller number of larger companies. This means that some companies will go out of business, especially the smaller ones. What sometimes happens is that the companies under pressure use collusion as a way of staying afloat. In Ireland AIB and BOI colluded in fixing house prices, that is clear as day.
      I personally would have no problem with the EU retail banks with Irish names like BOI and AIB going out of business to be replaced by EU retail banks with non-Irish names. The bank workers would be re-hired by the new banks.

  13. Hat tip to Edward Fullbrook

    The World is dividing into two blocs — the Plutonomy and the rest.

    It seems that CITIGROUP attempts to delete this report from the internet.

    I put it in my drop box. Help yourself.

    http://dl.dropbox.com/u/4914840/Citigroup%20Plutonomy%20Report%20Part%201.pdf

    http://dl.dropbox.com/u/4914840/Citigroup%20Plutonomy%20Report%20Part%202.pdf

    • Back in October, we coined the term ‘Plutonomy’ (The Global Investigator, Plutonomy: Buying Luxury, Explaining Global Imbalances, October 14 2005). Our thesis is that the rich are the dominant drivers of demand in many economies around the world (the US, UK, Canada and Australia). These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favourable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries. Also, new media dissemination technologies like internet downloading, cable and satellite TV, have disproportionately increased the audiences, and hence gains to “superstars” — think golf, soccer, and baseball players, music/TV and movie icons, fashion models, designers, celebrity chefs etc. These “content” providers, the tech whizzes who own the pipes and distribution, the lawyers and bankers who intermediate globalization and productivity, the CEOs who lead the charge in converting globalization and technology to increase the profit share of the economy at the expense of labor, all contribute to plutonomy. Indeed, David Gordon and Ian Dew-Becker of the NBER demonstrate that the top 10%, particularly the top 1% of the US — the plutonomists in our parlance — have benefited disproportionately from the recent productivity surge in the US.

  14. We are post democratic now…we’ve the euro fascists at the top creaming it off the socialised proles at the bottom.

    http://www.youtube.com/watch?v=ixAaBV7W5xc&feature=player_embedded

    Stop depending on a Government to fix it, start depending on ourselves!!!

  15. rebean

    Maybe this bank have actually defaulted. I didnt here it on the news but I guess we were never going to . Its like a closet default, a secret low key under the radar default.Like a person coming out to embrace the world with the truth. Instead of saying I am not straight they are saying I am broke!

  16. Deco

    {
    How much more evidence do we need before we conclude that the Irish financial establishment, like the Bourbons, has “learned nothing and forgotten nothing”? And like any crumbling orthodoxy the establishment deploys tactics such as fear and scaremongering rather than logic to bolster its out-dated position.
    }
    Very true. There are still 11 Reg Executive High end motors for the bank top brass, outside bank HQs.

  17. …but would could I possibly do?

    Just a short note, I am often confronted with questions and statements by people who have a fair grasp that the events unfolding are an attack on their integrity, their rights, and ability to create any wealth for themselves, such as:

    - But what could I possibly do?

    - They don’t care, so what?

    - Nothing is ever going to change, it does not make any sense to protest.

    etc. First of all, it is clear to me that there is a deep sense of resignation and fear, the latter is being fed by the channels of the very people who are in power and those with vested interests of course, as David rightly pointed out with reference to any default scenario.

    1.
    Political Price

    Every politician take the price to pay for his action into account, this is how politics works. [Again, Muasher the doctrine applies!] if they see that there is no price to pay, or the price comes in very cheap, they do not hesitate in their actions and implement just as they see fit.

    This means that as long as a Nation does not stand up in solidarity against the actions of their ruling parties, the price is very cheap.- Think about it! –

    Take the demonstrations two days ago for example. A group of parents and workers together with the technical group in the House made voiced their opinion loud and clear on the situation of special needs children.

    Bravo, but there is one problem. What we face is a situation in Ireland where the Trade Union Leadership is a heavily conservative bunch that is avoiding conflict at all costs, which brings the political price down to a bargain for the government. Oh in case you missed it, from January 2011 on the Tax relief for trade union subscriptions was abolished.

    What that means is that we face a classical divide and conquer strategy, and as a result, you see a wee protest here, and a wee protest there, and the impact remains too small.

    Only by joining forces, there is strength in numbers, only by mobilizing the public in much larger numbers, the prize will go higher and higher and the pressure increase. Look at Spain and Greece, of course, you have to look at it for yourselves, because the media blends out both protests in Spain as well as in Greece. Look at what protest did achieve in Iceland.

    Ask yourselves, do you really care what overpaid ‘smile and wave’ [hat tip to NWL] galleons galleons figure is traveling the world representing Ireland, at this point in time? Do you really think that a referendum on the bewigged class’s salaries is the most important subject that a referendum should ask the people of Ireland?

    Well, if you do not think so, then you know exactly what I mean.

    The people of Ireland need to demand a referendum as Iceland had on all these odious debts, of which we have accumulated and burdened every citizen’s shoulder with a total of over 46 bn Euro, and all of this went to Banksters who continued their gambles and their rip offs.

    Close all Banks, fire all the management, and do not rehire the same people, and in some cases, ban them from the business for lifetime. Establish new banks from the ground up that operate on a basis such as the GLS bank in Bochum, or Triodos Bank in the UK. Social Finance and social Banking is the way into a more sustainable future that is not based on parasite economies.

    Demand to rewrite this sorry piece of a constitution, this is what Iceland currently does, and they involve every citizen in that process, as transparent as can be.

    Show the markets that we as a people are SERIOUS about getting this country back on a healthy and sustainable track, and they will watch is closely and money will come back to Ireland sooner than ECB and EU Commission will want you to believe.

    Establish a citizens tribunal and give them special powers to investigate what was and still is happening in the IFSC, this is at the core of the business plan of the ‘Ireland inc shareholders.’

    All this talk about the corporation tax is a smoke screen, if Irelands business plan is based on lurking in transnational companies and vultures such as Maples and Calders legal eagles, we are operating from the very ground up on a criminal and unhealthy basis which will not help us in the long run.

    Take their license away and send them home to Ugland house on the Cayman Islands, we do not want your business any longer. Once you start doing this you will operate on the basis that what we do here, matters in the poorest countries of this planet, and only by acknowledging this direct link we will succeed to build a future that is more transparent and does not favor the rich and super rich, but favor those who have already nothing.

    Best
    Georg

    • 2.
      Odious debts

      …to be continued

    • Malcolm McClure

      Georg says “Demand to rewrite this sorry piece of a constitution, this is what Iceland currently does, and they involve every citizen in that process, as transparent as can be.”

      I totally agree. The key to all our problems is the failure of the constitution to protect the people.

      • LOL, I just realised my typos above. :)

        Damn it is so difficult to find good and loyal secretaries these days.

      • Deco

        We had Article 45 in the Constitution concerning the soverignty of the people being of higher importance than the solvency of the banking interests.

        We even have clauses concerning the dangers of cartels owning the factors of production.

        But the vested interests have made sure that these articles have been completely ignored, trampled upon and overwritten.

        And now we hav Suds in his usual “knowitall” pronouncements from the comic factory in D’Oliers Street telling us that we should hand over more of our sovereignty to institutions more pliable to the interests of the banking cartels.

        The political class have demonstrated that they will divert any constitution, break any moral principle, and deceive their own in order to make the world safer to the FIRE economy idiots.

    • A lot of what you said is preaching to the converted and I hear your solutions loud and clear Georg but it is like urinating in the wind expecting things to change in this country. The polls are putting the govt even further ahead than they were at the last general deception, Brian Lenihan has been Canonised and we are being told that Noonan has won back Ireland’s respect and credibility in Europe. This is what you are up against

      The polls say the govt is doing a good job and the biggest problem of all is that so many people believe this

      ‘Brian did his best’ is the latest one I keep hearing.
      Sorry I am being serious here so please stop yer laughing now Georg

      What do you expect when there are people in this forum and around Ireland who call the Greek people muppets just because they dare to get off their arses and hold, shock horror, drum roll, a protest of all things!

      I put it to you that people with such conservative attitudes are their own worst enemies and do not deserve people to fight for them

      The unions are bought and paid for and the people in the public sector will continue paying their dues and extract a heavy political price for industrial peace

      The only group who can drive the change you are asking for is the unemployed because unlike the outsiders of DMcWs imagination these people are the real outsiders and the ones with nothing left to lose

      I don’t read the Irish media or listen to Irish commentators any more because it just goes in one ear and out the other

      Give me a call when you’ve got your flying column together and I will send word round the village. There’s a Good man

      And give your secretary a pay rise

  18. Praetorian

    We are staring at a Japanese style lost generation.

    The duopoly is to entrenched with political interests that no new banks will be given licenses.

    No, we limp off the field of battle only to succumb to our injuries.

    I spent most of last night in a children’s ward in one of Ireland’s main hospitals, it goes without saying that the staff are excellent, unsung heroes all, but the place lacked investment, small rooms for families with sick children, little comfort, poor canteen facilities. I thought shame on Ireland and those bastards with their tens of millions of euro who come on TV telling the country how it is done.

  19. Dorothy Jones

    Now David, you might be a tad dramatic with: ‘I was terrified as I put in my card’, but it adds to the piece!!
    No Argentina then? Well I suppose it makes things a little clearer in terms of how long we will be in limbo. Greece will be sorted out or booted out at some stage; Spain may ‘fess up to the true extent of it’s bank debts and all will remain in turmoil for a while. When it settles, money will circulate here again. That’s probably about 5 years? More? Less?
    Glad I left that Koffer in Berlin.
    The last 11 years here have been interesting to say the least. A rich seam for research in psychology as well as economics. No doubt the PhD students will be arriving from to research it in the coming years…

  20. dwalsh

    John Q. Public says:

    “So why don’t bondholders just call it a day if they know we can’t repay them? What are they holding out for?”

    The senior bondholders ultimately are the elite class who effectively own and run the global monetary system; they control the main capital pools of the world. (It is important to realise that the rich lists we read in the media are complete bunkum; the people I am referring to never appear on those lists.) They are holding out for now to gain leverage for when their agents do come to the table. For them this crisis is not what it is for the ordinary citizens and nations of the world; it is not the crisis we read about in the media and discuss here. For them this is a restructuring of their estates. We are in the early stages of a major global restructuring.

    • John Q. Public

      I agree so lets play along in a way that benefits them and us. Provided they get nearly completely compensated by the ECB while simultaneously wiping out our debt then they can start lending to us again. It would be in their medium to long term interest to make things happen that way otherwise things will drag out indefinitely hurting everybody.

  21. Note to Mister Noonen

    Noonan on Radio this afternoon…. The corporation tax is not up for discussion.’

    Wrong attitude Mr. Noonan, announce to lower the corporation Tax down to 5% with the next budget and see how quickly Sarkozy wants to talk to Kenny.

    Negotiations? Pfff

    • Juanjo R

      ha ha!!!

      Get Michael O’Leary – he is the most unapologetic international celebrity brassneck we have – to make the announcement…and in France preferably too!

  22. CitizenWhy

    AIB bought a Bulgarian bank stake for $303 million, sells it for $143,000.

    http://www.irishcentral.com/news/Irish-Bank-sells-shares-for-fraction-of-what-they-cost-124411689.html

    Looks like the Irish banks are beginning to tiptoe into admitting their losses, and taking those losses finally. Perhaps they are feeling secure about the guarantees they are getting from the Irish government that the executives will be well and fully compensated no matter what happens. Don’t you dare say malfeasance. That’s not nice.

    • Deco

      Is this basically saying that AIB can take a bank worth 300 Million and convert it into a bank work let than a Semi D located in the Midlands on the books of NAMA ?

      As part of a “value-adding” activity ?

      Several key management personalities deserve the sack for this level of incompetence.

      I suppose now that AIB is a state company, they can expect the same treatment that is reserved for clowns running CIE, FAS, etc..

  23. StephenKenny

    I don’t really agree with David on this. In my view, the plan is to attempt deal with these insolvent banks slowly, and therefore to give time to grow out of the problem, that’s assuming that they really have a plan. The reality is that the past 3 years of printing and borrowing has been a desperate attempt to forestall the collapse of the status quo financial services system – essentially the Hedge Fund economies of the US/UK.

    If you look back, every economic downturn from the early 1990s onwards has been solved by even easier, and even cheaper, money. The financial services sector regulations have been repeatedly relaxed since 1981 (in the US).

    After the New Orleans floods, the US economy actually benefitted from enormous destruction. Given the situation, this is clearly impossible, and indicates that there is some sort of massive incongruity at the heart of the US economy. The same goes for the UK.

    They can’t lower interest rates any more, and “regulation” has reached a point where JP Morgan were officially leveraged almost 100 to 1 in 2008. So they’re currently printing/borrowing (I’m not sure there’s a difference any more) unthinkable amounts of money to try to get the economy moving. All this QE stuff is the last shot of their last weapon that they have.

    So far, at vast cost, it’s been kept afloat, but there’s some really weird stuff going on now. For example, there’re no securitised mortgages for the rating agencies to be paid to over-value, and for the bankers to sell and short, yet their profits are up. From what? Speculation on the various exchanges?

    They’ve lost their biggest money maker and yet their turnover and profits are up. So where’s the money coming from?

    There are two possible answers. Firstly, they coud just be getting some form of ongoing “free money” bailout from the state. Secondly, they are taking unbelievable risks on every trading exchange, leveraged up to the eyebrows and beyond. It does seem to be the second. as it’s causing the price of agricultural and other commodities to go completely out of control.

    At the moment, quite literally, the starving millions are paying directly for the Bentleys in London and New York. The problem is, it isn’t enough. To maintain the system, it needs more than the relatively small commodities markets can produce. It’s interesting to note, that the problem isn’t that the rest of the economies of the US & UK are dying, since, as with New Orleans, the Financial Services economy’s relationship with the rest of the economy has been an inverse one for quite a while: things that are bad for main street are good for the banks.

    My take on what’s happened, and will happen, is not to do with giant conspiracies, the illuminata, or any of that stuff. It’s simpler:

    The US & UK governments took the Enron shilling, and, “just for this quater”, hid the losses. “Just this one time, before we sort things out”. For 20 years, and every quater it was bigger and worse. Falling interest rates, increased on and off book debts, increased consumer debts, increased corporate debts.
    Then it blew up, the banks gamed the terrified politicians, and, unbelievably, the politicians gave in, so they can believe in “Just this one time, before we sort things out”.

    Maybe the fabled “Mr Blue” was right all along.

    • CitizenWhy

      Yes, excess money distorted many economies.

      But where did all that rxcess capital come from?

      Much of it in effect was money printed by the New York investment banks, not the US government. The creation of complex debt derivatives, sold as money equivalents, allowed those banks to multiply capital (which was actually debt) beyond the combined GDP of the world’s economies. Used as capital these derivatives pushed the creation of bubbles everywhere. Some of these derivatives were based on actual cash flows (such as mortgage payments) while others were “virtual,” based simply on another derivative, backed by nothing but that derivative. From one derivative you could create dozens more. If the original collapses (inevitable given the dodgy sub-prime mortgages in the US), then all the “virtuals” collapse with it.

      This problem has not been corrected with the “financial reform” bill in the USA. The whole cycle will happen again. In fact, if the Goldman Sachs hun gets to run the ECB, the ECB will become the prime source of a massive new fraud. The fraudsters creating these capital bombs always make money, as do some of their friends who buy and sell early, but everyone else takes the hit. Except maybe the political and banking class in Ireland.

    • dwalsh

      Good comments. However, given that there is an estimated 1.5 quadrillion of toxic assets (derivatives) in the global system, I do not think we will “grow out of the problem”. On the contrary we are in the throes of a managed collapse that will enable the creation of new global systems of economic and political governance.
      Europe for instance will not dissolve…Europe will come out stronger…but with the sovereignty of its component nations greatly diminished. This process has already begun for the peripheral nations such as Greece and Ireland. Eventually it will encompass all European nations.

  24. Juanjo R

    So the default wasn’t reported?

    Surely I’m not the only one who spotted this a week ago…

    http://www.independent.ie/business/irish/aib-deemed-in-default-as-euro26bn-buyback-offer-launched-2673582.html

    …however the next linked article from the weekend really scared me. It is by Brendan O’Connor, quite possibly the country’s most vacuous loudmouthed so-and-so ( after Malcolm M of this little “sandbox” blog, of course ) and it talks up our new-old finance minster in that rag refered to as the Sindo…

    http://www.independent.ie/opinion/analysis/noonans-going-rogue-and-its-about-time-too-2800001.html

    I wonder did Sir Tony give him a pat on the head and a nice bone to chew for that?

    Spain is clearly the one to watch not little banking events here or even the back and forth in Greece…the PP hammered PSOE in the locals recently and in places they never won in before too ( no mean feat – they had a proper civil war there ), plus there are national elections next year, and the camp protest in the Puerta del Sol and in other spanish squares (160 seperate protests!) by ‘los indignados’ lasted a whole month – so, all in all, I say Mr.Bean is now as beleagured as Cowen was a year ago…

    …and so politics being politics I’d be guessing the eventual Spanish default – there will be no bailout as it would cost too much – is gonna be nasty and stupid as anything we have managed or seen to date – then it will be time for all the PIGS to wake up and smell the bacon ( or ‘jamon’ as the case may be )!

    …so lets say – as an estimate – by the start of 2013 will will have new punts, escudos ( or cruzieros ), drachmas and pestas free-floating against the Euro?

    Odds anyone?

    • Deco

      Spain is a institutional state system in as much denial about the real state of affairs as Cowen & co.

      Right and left do not matter as much now.

      It is about ability.

      In Ireland, we have operators with little ability taking over from people with even less.

      • Juanjo R

        Deco – I don’t understand your points.

        What is ‘it’ in relation to ability and what is an ‘institutional state system’? are ‘operators’ politicans?

        I think right and left certainly matter in Spain 500,000 people died between 1936-1950 and another 500,000 fled – these things are not easily forgotten. The transistion occured only 25 years ago.

        • Deco

          The protestors in Spain have decided that right and left are both shafting them.

          Aznar is a Liar. Zapatero (Bean) is another fake.

          Both political strands are more interested in getting state jobs/contracts for their activists/mates than ideology – though ideology is important too because it works electorally.

          Same as here. Same as in Greece.

          The preoccupation and the problem is not ideology, in corrupt states like these. The problem is inability to do anything properly. The Greeks cannot collect taxes. The Greeks cannot tell the truth about GDP statistics. The Greeks cannot rein in the excesses in the system. Spain cannot regulate it’s banks, and cannot tell the world what is really going on. And Ireland is as bad as either of them. Just give it time, and you will see.

          • Juanjo R

            Deco – I’m still missing your point(s).

            Your new comments are clearer than the first set but just seem to be railing against everyone ( greeks = spanish = irish ) and painting things with broad strokes. There are differences, quite big ones.

            You seem to be angry at percieved ineptitude in all three countries. Perhaps if you moved to a well managed country (France/Germany) you would be happier. As far as I can see they – France/Germany – didn’t manage their banks any better than us they helped create the problem. Their own stagnation as economies was brought about by an increasing age profile meaning they need to rely on immigration to give them a fresh lease of life which they are now backtracking on and complaining about.

            To my mind – all I see you doing here is engaging in self hatred/borderline zenophobia certainly not clear balanced comment.

            And on Spain; Aznar is long gone – Rajoy is the PP’s leader and has been so for a while.

            Two links follow here one has a simple map and it possible to clearly contrast the reults of the 2007 and 2011 municipal and regional elections.

            http://resultados.elpais.com/elecciones/2011/

            You can see the countrys gone all PP apart from where there are disputes on autonomy…i.e. its gone very much to the right. Its not an accident – they do matter.

            The second below has an article with ‘los indignados’ of Seville it talks about their general political disillusionment ( it is as you mentioned) but it suggests ( at the end ) that of those who intend to vote their opinion is still pretty evenly split left and right. So it still matters also.

            http://politica.elpais.com/politica/2011/06/23/actualidad/1308832431_058208.html

            In my original piece here I was talking about when the FINANCIAL part of the crisis comes finally comes to a head in Spain then it may well suck us in too.
            I was suggesting Perhaps if we want a date for the inevitable default we should be watching the sequence of events there instead. Its a much larger economy.

            I made no comment on the ‘los indignados’ political stance. Indeed by calling them ‘los indignados’ I avoided indicating or suggesting dominant political leanings for those people.

            And speaking of ability – I was at the ULA forum in Dublin today. Theres some genuine energy but also some funny stuff coming out there!

  25. Tull McAdoo

    The “Abbots of Austerity” over in the ECB have sent their latest message to the Greeks, it seems that they “cant live, with or without them”….oh …oh…oh..oh with or without you, oh oh oh oh…..

    http://www.youtube.com/watch?v=yvthat7poF8&feature=related

    • Tull McAdoo

      P.S. Not sure what’s happening at the end of the video, maybe ,just maybe, they are planning to “Burn the bondholders”……

  26. CitizenWhy

    Is it true that the song “We’re a nation once again” has been offically changed to “we’re a colony once again”?

    • Malcolm McClure

      Citizen Why: Could be true. Also the song Sean Van Voght has been revised from:”Oh! the French are on the sea,” says the Sean van Voght,
      to: “Sorry Folks! the French are not on the sea this time either.”says the Sean van Voght;

  27. Is a financial fascism taking global control?

    Food for thought….

    Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power – Benito . Mussolini -

    All effective propaganda must be limited to a very few points and must harp on these in slogans until the last member of the public understands what you want him to understand. – Adolf Hitler -

    It means that, in fact, it’s – whether fascist is the right word I don’t know – more of a plutocracy than anything resembling a democracy; it has become a nation controlled by a very small, very wealthy elite. Peter Singer

    Under the species of Syndicalism and Fascism there appears for the first time in Europe a type of man who does not want to give reasons or to be right, but simply shows himself resolved to impose his opinions. – J. Ortega y Gasset

  28. Deco

    “Rollover”.

    I think there was a nursery rhyme about that once.

    Three Pigis in the bed
    and the little one said
    ….Rollover.

    “Rollover” is an improvement, because it means that responsibility is moving in direction of the creditors, and away from the EU taxpayer.

    It means that Greece is not able to pay the debts that it is due – and basically they get shoved out.

    “Rollover” is EU speak of a type of behaviour that Nouriel Roubini calls “kicking the can down the road”.

    And next…..can Greece reform it’s state structure ?

    Can Ireland reform it’s state structure ?

  29. Morning,

    I have a lot of sympathy with what Stephen Kenny is saying above re time to sort things out, my only issue now is that our economy is getting weaker as time goes by. The GNP figures from yesterday are truly shocking, if not unexpected. It appears to me that things are getting worse, not better.
    I am racking my brian as top how we get out of this without doing something dramatic, and I am not coming up with many answers.

    Best,

    David

    • Dorothy Jones

      NAMAlab has some answers David, not for the economy directly but creating a physical response within the built environment. There will be more publicity about this project in the near future.
      As for our economy…the sound of the ice cracking on a lake surface which precedes the thaw.

      • Juanjo R

        If NAMAlab has some solutions then I’d like to know what questions were first posed to it.

        I just visited today and took an hour or so to go around it. Two projects grabbed me for relevance to the title (as advertised) a few others for their more traditional handling of their thesis subject – i.e. demonstrating their architectural skills not so much anything to with the exhibiton title.

        I thought a lot of projects were lost between these two planks. I did think thought there are some individually interesting bits of work dotted about but, on the whole all the projects (bar one) seem to derive from that chronic architects economic blind spot – the idea that ‘enlightened’ clients turn up with money from nowhere and empower the architect/artists ‘heroic’ vision.

        Some projects were totally bizarre in my opinion.

        What was troubling for me too is that overall it seemed to suggest that the solution to over-development (and indebtedness) is yet more development (and more indebtedness)!

        Aside from that it didn’t deal with many real dilemmas and social concerns faced by us as a society now such as the large stock of new but crappy apartments developments, ill-suited to family life in urban areas and in now in a non-moving market; a cramped, badly outdated school stock; sky high commerical vacancy rates and high street/village streets being left deserted as small businesses depart them or fail.

        Its good though, I will conceed, that something is out there – perhaps some debate can start from this.

        The RIAI tried something along this line before I don’t know if it ever went anywhere.

        For those who don’t know;

        NAMAlab is the name given to this years 5th year architectural degree exhibiton at DIT Bolton Street. The entire years work was given over to using ‘NAMA sites’ and it focuses on imaginary architectural projects on individual sites – nearly all within the canal ring of Dublin. It finishes today at DIT Bolton Street but it maybe continuing as an exhibition at other locations in the near future.

        • Dorothy Jones

          Good for you Juanjo R, just back from the exhibition myself. It has now been extended for another week – till 1 July.
          This is only part of the NAMAlab project and is not a solution in itself. It encompasses a much broader brief. In parallel we have been working on the same theme from a legal and strategic viewpoint, including the development of comprehensive site evaluation matrices with requisite graphic representation. We will have an input tofrom this point on.
          A symposium will take place Oct 7 2011. I can give you more detail on your other queries and sim. if you wish – dorothy.jones.helmethead@googlemail.com

          • Dorothy Jones

            [PS I am not part of the DIT team in Bolton Street who who have started this initiative, they have done great work!]

          • Juanjo R

            I submitted something along these lines myself to the ‘Your country your call’ ideas competition of a year ago.

            It wasn’t fully developed though plus they were just interested in smart economy ideas that were already a long way on the way to development so it died as did any enthuasism I had.

            Actually – I was thinking of re-jigging my thoughts and putting it up in short form in the ideas section here.

            I don’t think the way to advance this stuff is through architectural fantasies though – I think it must be grounded. The visualisation can help with convincing non-visual/design people after the solid groundwork is done. I also think it needs to be allied/in concert with other measures in different fields too. Basically I think a monster as big as this for society can only be slayed by a 1000 little cuts – if you get my drift.

            I’ll drop you a line on the symposium if I’m about.

          • adamabyss

            Dorothy, what are ‘site evaluation matrices’?

            Thanks, Adam.

          • Juanjo R

            Adam,

            I’d be guessing it would be a type of ‘planning’ evaluation – its a statistical attempt to put a worth ( not financial ) on a site. So factors might be ( depending on the matrix ) – intrastructure present, transport links, population density, distance to areas with higher density of services, amenities and so on…

            Basically, to use extreme examples, an unserviced loan for field held by NAMA between Mullingar and Athlone would score badly where as a site in Dublin 2 would probably score well – depending on the matrix of course. Its a way of prioritising development in a qualified/transparent way I guess.

          • adamabyss

            Thanks Juanjo R.

          • Dorothy Jones

            Sorry Adam, site evaluation matrices are just lists of stuff which assist decisions to develop sites, or not, or in some cases demolish what is there.

    • It would appear that the time made available to banks was used to

      1. Reduce exposure to countries like Greece
      2. Continue to reimburse themselves with boni payments
      3. Continue to make heavy bets in parasite economies
      4. Find tactics to circumvent even moderate demands like Basel III
      5. When asked to contribute, make demands for guarantees and incentives

      etc.

      I would agree that time is against all of us at the moment, and the somewhat unknown Bank exposures in derivative markets still pose a significant threat.

      As for Ireland, the lack of Irish diplomacy and negotiations skills concerning the ongoing damage that is caused by french demands is more than disheartening.

      Instead of stupid remarks to the International press that DOF is going to print T-Shirts with letters that state ‘Ireland is not Greece’, [ shaking head in disbelief! ] perhaps making an announcement to lower corporate tax rate to 6.5% in december budget might trigger more interesting reactions from Brussels, Frankfurt and Paris.

    • breltub

      The reality is we need something “dramatic”, another word would be “realistic”, because the system is broken. Patching up the current system only reboots the process and we end up here in another few years.

      1.Ireland needs it’s own currency, preferable in my opinion a hard currency. No fiat every lasted too long
      2.It needs a functioning government, and an updated/new constitution limiting the power of government both national and local
      3.We need to remove the cosy relationship between big business and government.
      4.Ireland needs to burn every cent, 100%!! of non-sovereign debt currently lynched around our neck. Do it now

      On a national level no country has friends, only self interest. We need to grow some balls and look after number one, it doesn’t matter what happens with another country’s debt.
      All debt is a gamble – tough sh*t investor, deal with it – T&C’s apply. We set those Terms and Conditions. In the current game it simple. “lead the way or get f*cked over”

      And that’s just the start of what needs to happen; society, culture and personal development can be worked on from there – and there is plenty of improvement still to be got from that end from what I observe when looking around!

    • Deco

      This is going to take time. Simply put, the debts have to be worked down.

      The only solution is that we should have not got into this mess in the first place.

      Considering the level of state borrowing, a marginal increase of GNP is a disaster. State borrowing is always very GNP intensive, compared to export led growth which is more GDP centric.

      The biggest problem is not GNP growth. The biggest problem is the level of actual activity, with various disincentives, and acquired behaviours resulting in a large share of the workforce unemployed or underemployed.

      The cost of living is still too high. Taxation at the marginal level is too high. And stealth taxes are hiking the cost of living. We are not efficient enough. If we were, then we could reduce the minimum wage and still provide people with the same standard of living – but at the same time see unemployment come down.

      We are restrained by the structural impediments set in place in the Ahern era of social partnership, when no quango was refused the right to extor some sort of levy or funding from the people, when no vested interest was challenged for price gouging, and when no minister wanted to minimize the role of the Santy Claus state.

      Reform the state. In Greece, we have seen the results of a really badly run, corrupt, Santy Claus, one for everybody in the audience state. I am not convinced that we are any better. Ahernism is a policy framework for creating the mess that the state is in. Constantin Gurdgiev and Colm McCarthy have been lambasting the performance of the state for years. The unions come along everytime and say that it is ideologically based, and then refuse to answer the serious questions about what is going on.

      I think I remember hearing that the basis of Austrian Economic theory is that behaviour breeds results. The behaviour of the economic agent is what matters, not the grand plan of NAMA or anything like that.

      Well, we have a tradition of irresponsible behaviour. And it is continuing. Nobody in this country seems to be responsible for anything. Nobody is responsible for the mess in the HSE. And Rody Molloy is certainly not responsible for the state of FAS. Nobody gets sacked. Nobody gets publicly reprimanded. And if anybody says anything overly critical, we have threats to sue on the basis of “defamation” and damage to the “right of good name and character”. This is absurd.

      Groundhog day – same behaviour, same results.

      • @Deco
        Fundamentally and absolutely correct! I could not possibly agree more with you! While we may debate the ins and outs of leaving the Euro or burning bondholders or this or that, our strategy comes to nought if our culture remains the same!

        This is what needs to be shouted from the rooftops – Whatever our circumstances we are a very corrupt little country with corruption and self interest at the heart of our government, legal system, medical counsel, local council, semi-state cartels, almost everywhere! Whatsmore this corruption/vested interest is systematically ingrained and protected.

        We have a certain public representative found to be corrupt by not just one tribunal but two. Punished? – Nah………Figurehead in one of the biggest proposed infrastructural projects currently on the table……Why absolutely and what’s wrong with that?

        Christ I’m nauseated!

        I’d much rather live in a poorer but equitable country than the one we currently inhabit!

        We can survive anything, even being kicked out of the Euro and EU if we can unite around basic fundamental principles.
        But alas what’s a principle?
        In modern Ireland I ask you seriously……..What’s a principle?

        That the best paid are so paid in ratio to their responsibility? ……Eh No!

        That a solicitor/barrister will charge a practical and reasonable amount for their skill?……Eh No!

        That a Doctor sees a two minute consultation as not worth €60?……..Eh No!

        That a Bishop tells the truth and doesn’t condescend the people?…….Eh No!

        That a politician tells the truth and doesn’t condescend the people?…….Absolutely No!

        Lets face it the list is endless.

        Now I know I’m slightly paraphrasing here, but remember how the biblical God told Noah to go and find him just one non-corrupt person and that itself would prevent the flood?

        Likewise if we can name one example of Irish adequacy in officialdom? We just might be able to avert the next home grown disaster?

        In summary we don’t do management – We don’t even understand the concept? And until we do this is the only reality we can expect!

      • Nice summary, well, I mean down to the point.

        The transformation of society can only happen if the people demand it. The alternative is what we observe unfolding since 4 years now.

        Perhaps the people want to see how far down it can go? Until one evening on the news you hear Kenny saying, sorry, we all resigned, there is nothing left we can do, the country is fucked, every man for himself, God bless America.

    • StephenKenny

      The point I was making, clearly very badly. was that, like Enron, everything is now very short term – the politicians hope that “this quater” they can start to sort things out, and the trading exchanges are now very peculiar, and very much “traders only – no investment”.

      The banks said to the politicians: “We can make the economy look good” and because of the vested interests of the trade unions, state sector, and the dreadful quality of the media in the US, UK, and elsewhere, that was all that was necessary – it just had to look good. What is more, it was just for this quater, next quater will look after itself.

      They were/are buying time with money taken from the increased price of food and fuel, globally from all those on low incomes, from the next generation of taxpayers, and from pension funds. The bankers make a percentage on everything, today.

      They are buying time, and it is being wasted.

      We are back to what we were saying here 3+ years ago: Wealth creation is hard, and it isn’t just about having lots of money. Instead of the hard things, the money is spent on the businesses and instituions that are easy to put together: imported retail, state sector, property, financial services, and so on. It generates no wealth, and anyone can do it.

      The defaults are inevitable, but how it’s too happen is complex, since everything and everyone will overreact, if it’s executed badly.

      The problem is that everyone else needs to default as well, and if you think it through, there’s no one to bail out everyone. It really is different this time. Consumers are $trillions more in debt than during the 1990s, so are the corporates, and governments.

      The problem is global, and every is looking at it as national: “Let’s see if we can get our neighbours to bai us out, in some way” (low tax rates, defaults,
      loans, whatever), whereas a global “we” should be looking at it as a global problem. Unfortunately, there is no “global we” – just a group of people who’ve proven beyond all doubt, by their actions, that their interests are not aligned with the majority, in fact, are in direct opposition.

      The global problem is much worse today than in 2008, but we’ve taken the equivalent of Enron’s off-balance sheet short term measures so it’s “OK for this quater”. Just as they ran out for Enron, they’ll run out for the us.

      The best thing we can do is to start to get everyone to understand that the lovely lives we’ve led for the 20 years are gone for good, and we must get used to being poor again. The second thing is to get people to start generating wealth again.

      • I think that debt forgiveness would help to disembowel Bankster organisations that are no in political control, and besides, without massive write offs, it is not going to work in any case.

        What is lacking here is political will. The reasons for that are multifold, partly they can be found in political figures already representing Banks, not the public anymore.

        The power of banking cartels has outpaced that of policy makers big times, just look at the arrogance and attitude with which they now blatantly obvious start to circumvent Basel III.

        They need to be dethroned or they will continue to ride this debt machine and ruin entire nations. Goldman Sachs demanded Ireland to hand over even more control, now ECB is occupied as well.

        What is left is for the people to demand change, the political class will not do it, we witness that since four years.

        • StephenKenny

          Debt forgiveness means that the people who lent the money don’t get it back, and since the people who lent the money are basically German, French, and British pensioners, taxpayers etc, it relies on their governments to bail them out. It wouldn’t change the banks or the bankers.

          The core of the problem is the regulatory changes that occurred at the end of the 1990s – allowing traders (Goldman Saches, etc) to have limited liability, allowing traders to speculate on the commodities markets, and so on.

          In one way or another, the defaults are certain, the problem is how, and if we don’t regulate the financial services sector properly (in spite of all the tough talking, it looks almost certain no one is going to do anything), then they will actually do more harm than good: Huge losses wil be passed across national boundaries, and the people who made the $trillions in losses get to do it all over again? Or perhaps you believe that everyone’s learned their lesson and never again will 1 in 4 new cars bought in Ireland be a Merc/BMW (2006, I think).

          I would suggest that the banks are desperate for these defaults to occur, so they can get back where they left off in 2007, this time focussing on savings and pension funds, probably (I think that there’s about $3 trillion funds under management left in London, at the moment, which is equivalent to about 20 years of bonuses for New York / London, never mind shareholder profits).

          • StephenKenny

            Which means, I agree with you, but:
            If we don’t have the political will, then the regulatory changes will not occur. My problem is that I have no faith at all in the curent political/media setup, so see no chance of this happening until people start marching, and frightening the politicians and media, which they will only do when things have got a great deal worse.

          • Yes, I too am afraid that the threshold before the public sphere has realised what is really happening is very high.

            Morgan Kelly told me once, when I asked him on his view of debt forgiveness, that once liabilities are another ones asset, while this is true of course, it is also text book economy, and I intend to think that in the essentially ‘plutonomy’ driven pseudo democracies massive changes have to take place, and the assets that were accumulated, well, I consider them ‘illegal’.

            I think you rightly pointed to the fact that the people who made losses, not only paid themselves obscene boni, but did it all over again in the past 4 years, there is enough evidence about it.

            You know, in the past few weeks I often wondered, imagine a theoretical scenario of a data chernobyl, including their fail safes, imagine all debt [which are assets as well of course] would be wiped out over night, I mean every single debt on the planet. Now consider who the debt owners at large really are, and who will suffer the loss. Not an unInteresting scenario I think.

            If you step back from all that and try to look from the distance, hoe insane is all that, I mean really insane? A bunch of twisted super rich and Banksters screw up the entire system, and to be clear, this is no B. Madoff or the likes, they are rather insignificant, and the reaction of the political incumbents is to feed the very same people again? This is I believe what they call risible.

            This whole thing is ideology infested, and that makes it even worse, many of these people are deeply convinced that they are doing Gods work, this is not an exotic minority, it is rather a large group who is convinced of their actions, and every time in history when fatalism came into play…. oh my… NOT good.

            Instead of the media reporting on the events on the streets in Spain, Greece, even Luxemburg, it is totally ignored.

            The little hope I have, is based on experience in talking with people from a great variety of political views and social background, very quick I see common ground when it comes to the questions who the main culprit in this tragedy really is. So from this point on there is common ground which might enable people in all our countries to stand up and overcome their fear, and hey, I mean this is not China, we are in Ireland, I would understand their fear in China much more.

            If the EU would have been a functional democratic organisation, we would have asked the people in all european countries, and not leave it up to corrupted pseudo experts who are the mouthpiece of vested interests to make decisions on behalf of what, something half a billion people?

            To me personally, this whole thing is rather ridiculous, seriously. The real problems we face are of much greater importance, and we are wasting our time with a handful, compared to the rest of us, rich and super rich who try to tell us that we are to be impoverished now, and ought to go back to Lord and Vassal structures, of course them being the Lords.

            When i listened to Davids Interview with Bill Black, and I did that twice, it really says it all.

    • Sounds like time to lower the life boats

      • uchrisn

        David keeps coming up with good ideas for solving the finacial and economical problems and is continuosly proved right with time and hindsight. I encouage him to continue enthusiastically to slove the issues even as the wrong decisions make it more compliacted.
        Incredibly if you talk to the people who always disagreed with David and agreed with our countries cabinet, they are usually really stubborn in not accepting they were contanstly wrong. Some still believe that the right decisions were made and time will prove them right – like Dan O’ Brien. However time can never prove them right as Ireland now has 15% unemployment and has to pay 11% to lend money as a country. Iceland started from a much worse position, is now in a much better position and will be in the future. I woould really like the DOF and the Central bank, Politicans, various economists and journalists, Mr. Sutherland, Mr. Bruton etc to now go on record and say they were wrong.
        As time goes by slowly one here and there are finally admitting the obviuos, that they were wrong and David was right.

  30. Deco

    China has had an inflation problem recently.

    http://www.marketwatch.com/story/china-premier-we-have-whipped-inflation-2011-06-24

    I would not be so optimistic.

    Once inflation shows up, it has always proven a very difficult thing to get under control.

    There is one option that the US has been advocating to get China’s inflation under control – allowing the Yuan to rise in value compared to the currencies of it’s major trading partners.

    We have inflation in other countries also, by the way – but it seems that no Western politicians, or even central bankers are confident enough to say that they have inflation under control – even when they are using dodgy statistics to measure inflation.

    • breltub

      Draw down the rest of the “bailout” money, buy 60billion of physical gold.
      Send one of the Navy ships to pick it up
      Deposit it in the “New” Irish Central bank.
      Put the Army guarding it.
      Issue a new currency, it’s slogan can be
      “backed with more than the FED and ECB combined, deposit with us”
      Adios EURO/USD/odious debt!

      is that too simple?

      • Deco

        Breltub
        It is dangerous to have a currency back by something real like gold, or silver – when it is managed by clowns like we put in charge of the CBoI, the DoF, and IFRSA.

        This stupidity of a director from IBEC and a director from ICTU, which is the Ahern method of “one for everybody in the audience” is absurd.

        Get back to putting people in charge on the basis of their intelligence, character, judgemental ability, and eagerness to work. We need a performance ethos, not a “everything is swell, time for a few rounds” ethos.

        It is absurd.

        A large portion of the population knows it is highly absurd, and unfair and wrong. But everybody is resigned to a sense that nothing can be done about it.

        We have behaved ourselves into the sewer, and the only way out will be if we behave our way out. Confidence tricks, bailouts, and all the other cop-outs are not going to work.

        Ireland – lesson number 1 – learn to be responsible.

        Individually, for a start, because our group culture drives responsibility out of existence, and that will be next.

        • breltub

          I agree with your issue about the lack of accountability and responsibility in Ireland, it is true that no one ever has to pay the price.
          Like Pauldiv above I’ve quit watching and listening to the Approved Information Council [RTE et al]

          But when talking about making a change like going back to our own currency, and changing the way we shape our economy, I also mean we change the way everything else is structured HSE/Dept.Education,finance,Defence etc etc.

          Where to begin – I agree step 1. Responsibility

  31. Well, it is done, Goldman Sachs takes over ECB.

  32. CitizenWhy

    Noonan’s No-Nonsense Economic Development Plan: Shop till you drop.

    http://www.irishcentral.com/news/Minister-urges-Irish-to-shop-till-they-drop-124483714.html

    Maybe Noonan’s plan was why the ATM’s still dispensed cash.

    Take that cash and be off to Belfast, London or New York to spend, spend, spend!

    And no sour grapes from the unemployed and the mortgage poor!

    • CitizenWhy

      Forgot to mention: Does Nonan grasp that people spend their money domestically only when their currency is weak. The Euro still buys more than the pound and the dollar, so the sensible thing to do is to spend outside Ireland.

    • Colin

      It would be a good idea if Noonan reduced VAT to 0%, for a period of time, say 3 months, then bring the rate back in at 20%, then repeat the trick again in 2 months time for another 3 months, all the time keeping the public guessing when the 0% expires, so that the public who have money stashed away will decide to spend some of it.

  33. coldblow

    Stephen Kenny

    Is this more or less what you were referring to, particularly the last 3 paras? (From a recent article by Michael Hudson):

    “Only the “Crazies” Get the Bank Giveaway Right

    “Financial crashes were well understood for a hundred years after they became a normal financial phenomenon in the mid-19th century. Much like the buildup of plaque deposits in human veins and arteries, an accumulation of debt gained momentum exponentially until the economy crashed, wiping out bad debts — along with savings on the other side of the balance sheet.

    “Physical property remained intact, although much was transferred from debtors to creditors. But clearing away the debt overhead from the economy’s circulatory system freed it to resume its upswing. That was the positive role of crashes: They minimized the cost of debt service, bringing prices and income back in line with actual “real” costs of production. Debt claims were replaced by equity ownership. Housing prices were lower — and more affordable, being brought back in line with their actual rental value. Goods and services no longer had to incorporate the debt charges that the financial upswing had built into the system.

    “Financial crashes came suddenly. They often were triggered by a crop failure causing farmers to default, or “the autumnal drain” drew down bank liquidity when funds were needed to move the crops. Crashes often also revealed large financial fraud and “excesses.”

    “This was not really a “cycle.” It was a scallop-shaped ratchet pattern: an ascending curve, ending in a vertical plunge. But popular terminology called it a cycle because the pattern was similar again and again, every eleven years or so. When loans by banks and debt claims by other creditors could not be paid, they were wiped out in a convulsion of bankruptcy.

    “Gradually, as the financial system became more “elastic,” each business recovery started from a larger debt overhead relative to output. The United States emerged from World War II relatively debt free. Downturns occurred, crashes wiped out debts and savings, but each recovery since 1945 has taken place with a higher debt overhead. Bank loans and bonds have replaced stocks, as more stocks have been retired in leveraged buyouts (LBOs) and buyback plans than are being issued to raise new equity capital. Behind every LBO is the desire to keep stock prices high, lavishing rewards to managers via the stock options they give themselves.

    “But after the stock market’s dot.com crash of 2000 and the Federal Reserve flooding the U.S. economy with credit after 9/11, 2001, there was so much “free spending money” that many economists believed that the era of scientific money management had arrived and the financial cycle had ended. Growth could occur smoothly — with no over-optimism as to debt, no inability to pay, no proliferation of over-valuation or fraud. This was the era in which Alan Greenspan was applauded as Maestro for ostensibly creating a risk-free environment by removing government regulators from the financial oversight agencies.

    “What has made the post-2008 crash most remarkable is not merely the delusion that the way to get rich is by debt leverage (unless you are a banker, that is). Most unique is the crash’s aftermath. This time around the bad debts have not been wiped off the books. There have indeed been the usual bankruptcies — but the bad lenders and speculators are being saved from loss by the government intervening to issue Treasury bonds to pay them off out of future tax revenues or new money creation.”

    http://michael-hudson.com/2011/06/how-a-13-trillion-cover-story-was-written/

    There are a couple of new articles on his website I haven’t had a chance to read yet.

  34. Target 2 Discussion response

    Those of you who followed this rather academic discussion. Just got this response in my inbox.

    Paper:
    http://dl.dropbox.com/u/4914840/cesifo1_wp3500.pdf

    Date: 24 June 2011 16:04:00 GMT+01:00
    Subject: The True Significance of the Target Imbalances

    The exposure by Hans-Werner Sinn of the massive imbalances that have accumulated in the Target settlement system has triggered a heated debate in scholarly circles and in the German and international media, with economics pundits taking positions on either side of the argument. In essence, what Mr Sinn said is that these imbalances amount to a hidden bailout by the European Central Bank of the stricken economies in Europe’s periphery that is of a purely fiscal nature and closely resembles the bailout operations via the Luxembourg rescue facility being set up by the euro countries. Hans-Werner Sinn and Timo Wollmershäuser from the Ifo Institute have now written a comprehensive working paper intended to clarify the issue by providing the arguments and the necessary empirical data.

    Sincerely,

    Julio C. Saavedra
    Director, External Relations
    CESifo Group

  35. coldblow

    OT, just noticed this article in today’s IT calling for more non-denominational (‘common’) schools.

    http://www.irishtimes.com/newspaper/opinion/2011/0624/1224299523075.html

    Child citizens who will “critically assess” their “inherited religious or non-religious commitments”. Come again? Try that down Clogger Road and hang around for their assessment.

    If I weren’t a Catholic I’d still probably prefer a Catholic school as it’s the closest thing we have to an ideology-free zone.

    The IT: It’s good there are still some things we can rely on. Love the civic values bit. I happened to be reading over an old John Waters article last night about the fact that probably a disproportionally high number of the Ansbacher account holders would have been ‘takers’ of the IT (because the common people either had few savings or had simply not yet heard about the scam) and vice versa.

    So it should be ‘common’ schools for the common school-fodder, who have few enough prospects anyway. The least we can do is spare them this further indignity. Non-non-denominationalism – it’s the only game in town.

    No, and I don’t want anyone coming back with non-non-non-denominationalism either.

    • Colin

      Nick Clegg, the Deputy PM of the UK, is an atheist, a confirmed and public atheist, and guess where he’s sending his boy to be schooled? Yes, you’ve guessed it, a Roman Catholic school. His get out of jail free hypocrisy card is the fact that his wife is a practicing Catholic, and its HER wish to have their boy schooled in this way. So, we know who wears the trousers in the home of the Deputy PM.

      Why can’t all these clever, successful and careerist Atheists who attack the Churches at every turn find somewhere else to send their precious darlings? You’d think there’d be schools founded by Atheists, for Atheists, or do you just have lazy Atheists who couldn’t be arsed founding a school according to their beliefs or lack thereof, or are Atheists just Atheists because they prefer to lie in on a Sunday morning?

      • CitizenWhy

        Some of the Catholic secondary schools, Princethorpe for instance, in the UK have become quite successful at prepping students for top performances in their uni exams, without all the trappings and establishment pretensions of Eton, etc.

      • CitizenWhy

        Forgot to add that the UK families (many prosperous, professional, Irish-origin) who send the kids to Catholic schools are naturals to recruit to the Liberal Democrats. Whatever Clegg’s reasons, he is getting connected to a network important to the future of his party.

      • Deco

        Clegg is another complete fake.

        I think that he said he would not go into coalition….and er…we see what happened. Concerning herself wearing the trousers in the Clegg household, given what we have seen concerning Clegg, that would be the better outcome for both of them – she is probably the brains of the operation….

  36. StephenKenny

    One more thing to think about.
    In the countries that I know something about, there’s a further issue, which is that they seem to have passed some sort of employment tipping point.
    To a very large extent, the only sectors that now seem to offer a decent life are the aforementioned state, property, financial services, and retail.

    Therefore, it is no longer worthwhile to engage in wealth creation, which is very much inline with a system in which the physical destruction of a city, or the bulldozing ghost estates, is good for GDP.

    This, it seems to me, is an interesting indicator that something has gone very wrong over the past 20 years, and is now structural.

  37. CitizenWhy

    Perhaps the new Goldman Schs head of the ECB will come up with a scheme to turn all its debts into dodgy derivatives and trade them away to gullible Asians, Americans, Arabs and dictators thus feeing Europe to have plenty of capital to invest in sensible projects for economic growth. Perhaps that’s the secret plan. For a novel, anyway.

  38. PMC

    The calibre of politicos in Ireland is nothing short of embarrasing. James O’Reilly and Alan Shatter are about the only two of the current crop who have practical experience related to the portfolios assigned.

    James O’Reilly spoke the other evening on The Frontline, and it was quite clear that he was comfortable conversing on plans to set about some semblence of reform in Health.

    Similarly with Shatter; he speaks with an air of someone who’s comfortable handling the issues under his remit, because he knows the lie of the land.
    Now, Noonan, on the other hand, and Creighton for that matter also, quite clearly haven’t a clue what they’re talking about. It’s immediately apparent each time they open their mouths, the words rolling off their tongues are not their own. Creighton the other evening, couldn’t master a simple %age calculation on Vincent Browne; yet she’s in Brussels handling negotiations on Corporation Tax etc…
    It’s for this reason that we’re being led down the garden path as those in Europe can clearly tell that they’re dealing with amateur politicians, but professional gombeens.

    When David, Constantin etc.. talk about economics, they’re engaging to their audiences because they provide insights that only those with knowledge of the subject can provide.
    Leo Varadkar himself, openly stated that he knew very little about sport when appointed, other than playing a bit of cricket while at school. At least Leo seems to be honest about things, even if he gets shot down thereafter.

    The problem, is that being a politician for many, provides a sense of inflated self worth as opposed to providing substance, and the necessary foundations for the wider society to create a properly functioning economy. Its effectively a monstrous ego trip, that can be calamitous for innocents if it goes wrong.

    There’s a real disconnect between public representatives and the people they’re supposed to represent. It needs to start being less about their own opinions and more about implementing what’s best for society.

    The Seanad typifies the bullshit of Irish politicians. They’re in there, slouched over the seats, half of them totally disinterested in whats going on, and worst of all, what’s spoken has no resonance with anyone.
    It’s a waste of time and money and the doors should be locked on Monday morning. That’s it, the end of it. Does anyone think the country would be any different, were the whole charade ended on Monday.

    This country is miniscule, and as a result of the incestuous shenanigans that goes on; the top brass continuously engage in musical chairs as far as board appointments etc…

    • Yes, and it is not confined to Ireland, it is the case for greater Europe in deed that elected representatives are of rather low caliber, one could say the scene is infested with career opportunists.

      This is not to say that you need an economic expert to be minister for finance, or a 12x Olympic Gold winner to head up sports, far from it, but the overall intellectual capacity is a problem and is rather disappointing.

    • PMC

      In order to regain confidence and reign in the diconnect between society and Government, a platform with the ability to host referenda on a range of issues should be put in place. No long drawn out scenarios with election type posters etc… just a robust, independently verified, electronic voting platform which will determine the will of society in a transparent manner. I think most people accept decisions based on the greater good of all, and listening to the debate at present, many people in this country can tell what’s good and what’s bad.

      Whilst there can be a populist view on issues; a view that in many cases may not serve the country well, there are still many decisions that if put to the people, will create a more harmonious society and hopefully reclaim some of the morals that were lost during the so called “good” times.

      It’s quite clear in many instances that politicians haven’t the balls to reign in the Premiership footballer wages that some of our civil servants are on, even though most of these services are poorly run and are haemorraging money that could be put to better use elsewhere if entities such as CIE were properly run.

      These decisions and many others should be put to society, and we will then see a nation were people feel that they have an opportunity to contribute into how the state is run.

      Furthermore, politicians who make false claims on what the plan to do if in power, could quite easily be removed if these plans prove to be a false dawn. We simply cannot afford to have any more halfwits at the helm and we should not have to wait for years in order to vote them out. Mary Harney would have been ousted years before she was under such a system.

    • Deco

      The Seanad is a complete waste of space.

      A better idea would be to get the local authorities and the universities to send one representative each to a hotel in the Midlands and to debate the state policy for a month in every three. Non-stop. Preferably a NAMA hotel, without any alcohol. And with a golf course. And convert the Seanad into a Museum or something else.

  39. Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one or, RISK AND SECURITY in State Institutions and Finance Benjamin Franklin, 1706 — 1790

    There are very disturbing trends in the overwhelming politically right wing EU that can be described as anti democratic, promoting and implementing the tools to dismantle citizen rights, liberties, freedom and privacy.

    The same happened in the US with the implementation of the patriot act and the homeland security department.

    Your email, your phone conversations, your entire behavior profile, from your daily shopping, to your internet searches, your credit card purchases, the books you rented in the library, your handy connectivity.

    Did you not have recently a two hours lasting skype conversation with a friend who’s name Fahim Mohammed triggers a red flag in the database entry which is linked to your profile? This profile which has a superb set of your pictures included, from your participation in a protest against government austerity, to some random camera clips from London.

    Why did he stand there for longer than 2 minutes staring at the HSBC building?

    Politicians however will respond to us ‘What would a honest and law abiding EU citizen have to hide anyways?’, and hey, we do all that to protect you, the good citizen, against terrorists.

    Freedom in Europe came at a great cost that was paid by generations. The past 10 years of EU and US political activity however focus more and more on the so called ‘security’ aspect, which is used to dismantled the freedom that was achieved.

    Politicos are making good use of fear to push through legislations and technology to implement a structure that would make a Orwellian/Huxley scenario look like Harry Potter novel.

    Crime prevention is one of the buzz words that are used to justify this attack on freedom. Oh, and let us not forget the criminal tax evasion activities of your hairdresser who did not book the last time he cut your hair.

    Do you insist on a receipt when you got your hair cut? Why not?

    There is a funny relation of risk and security if you look at it from a distance. Bankers now generated products and structures that allow them to book guaranteed profits, no risks involved! How is that? Well, it is simply happening through the policies of EU/ECB/IMF, austerity and bailouts. The risks the banks took were no risks at all as they were covered by entire nations, and their citizens condemned to a poverty stricken future.

    The State and the EU implements ‘security measures’ that are designed to guarantee their political survival, and allows them to have control over transparent citizen at all times, redesigning democracy into a rather totalitarian bureaucracy while maintaining a skeleton of democratic illusions, elections.

    Financial institutions and major transnational corporatism already substituted real politicians with crash test dummy puppets that act according to the designed process by following lobby demands. A incestuous mechanism of revolving doors is reward structure and maintenance guarantee at the same time.

    This is the bigger picture of David’s Insider description, which is so very true for Ireland, but even more so on the big stage.

    Thee increase of security related policies in the past 10 years is significant and disturbing. Germany is probably in a leading position with this tendency, but as i said this is EU wide and finds its expression in the data collection Blitz that the EU is trying to push trough currently.

    If you think about it, it is paradox, we look back on the longest period of stability and peace in Europe ever, but Fear has been trumpeted in the past ten years by media and politicos on a daily basis, forcing even more policies to dismantle freedom and privacy.

    In my opinion, all this started with 9/11.

    This is not a conspiracy lunatic paranoia, it is rather a number of developments and events that all come together.

    Since years now media in print and broadcast, as well as hollywood blockbuster, push a view of the world that we are 2 seconds before apocalypse will wipe us all out. Whether it is the bearded muslim, the ever present threats of terror, the global financial crisis, the climate change, the extinction of species, foot and mouth decease, bird flue, now the E.coli, the channels are constantly promoting one message.

    tic toc tic toc….Be afraid, be very afraid!

    The emotional manipulation of the masses is an ongoing process that is designed to implement these new Orwellian/Huxley like state Institutions and policies, which in return creates in-transparency, more secrecy and less freedom and liberty, less democracy.

    The press does not inform the public on the EU policy Blitz that is happening, they are to busy to manufacture consent instead. The UK is perhaps the best example for a control state with their policies.

    The dogma that a citizen who drives over a red light at 3 AM in the morning on empty streets is suspicious, why would he not go ahead and plant a bomb in parliament, he already ignored our rules and laws, is part of their rational to justify further mechanisms designed to have access to all aspects of your life.

    Believe it or not, anti terror laws in the UK are applied to noisy children or the illegal sale of pizzas sales on the streets. Iceland was declared a terror state by the UK.

    Everyone is guilty and suspicious until proven innocent could be the slightly exaggerated
    Headline of this catalog of policies that is pushed through in stealth mode as we speak.

    Fearful citizens will not engage in protest, this is a side effect of the events unfolding and Ireland is perhaps a good example.

    In the year 2011, protest and civil disobedience has a different importance than 10 years ago, it has become a citizens duty to stand up and express their discontent. To stay silent is not really an option anymore, it would be indifferent, ignorant.

    NO FEAR!

    Best
    Georg

  40. Colin

    NAMA’s Frank Daly on Pravda Radio now, re-writing history, telling lies, obfuscating and telling more and more lies. David, if you’re listening, please get on to Pravda about this since Maid Marion is out of her depth and biased in favour of Official Ireland.

  41. [...] the Irish bank AIB defaulted last week and nothing happened. The ATM’s kept working, the grass kept growing and the sun rose the next day. Remember, the [...]

    • Malcolm McClure

      John Q Public: I just read the same prediction in Mauldin and regard it as highly significant. This is a must-read as it affects everybody.

  42. Chapter two provides and excellent and accurate chronology of events:

    http://mises.org/books/bagus_tragedy_of_euro.pdf

  43. Malcolm McClure

    Why should Ireland have a high cost of living? According to Agriculture Minister Simon Coveney we produce enough food to feed 36 million people. We live in a veritable land of milk and honey. If we went bankrupt, for what appear to be merely technical reasons, within months banks would be falling over themselves to lend us money.
    If we pulled out of the EC, we might lose some foreign investments that provide some high grade employment and some tax revenue but little actual profit for reinvestment here. Look at Apple. Billions in accumulated cash reserves but opening new assembly plants in Brazil, not Ireland.
    On the other hand we would be released from a lot of restrictive EU edicts about milk and fish quotas etc. and we would be a Nation once again.

    • Tull McAdoo

      Dont forget the one about the “straightness of your bananna”….. and now having said that I am reminded of the that clip I posted some years back about the “great British sausage”…..Yes Minister…Yes Malcolm….

  44. Both DmcW and Noonan are wrong.

    Noonan wishes to burn senior bondholders, but do this with delicacy and diplomacy based on persuasion, but only do this to ‘warehouse banks’ such as Anglo, maybe AIB and others? He’ll talk about this in the Autumn while Rome burns.

    DmcW, on the other hand, believes all odious banking debt should be renegotiated asap, as of now. He would I’m sure travel to Frankfurt tomorrow if doing so, could do this.

    The only way to do this is to recognise that you cannot negotiate this matter with the ECB, neither Noonan nor DmcW appear to be able to see this.

    This is something we can only do unilaterally. Read why below:)

    http://colmbrazel.wordpress.com/2011/06/26/the-way-forward/

    Enjoy the hols.

    • Malcolm McClure

      cbweb: John Maldin would agree that Colm McCarthy is overly optimistic. JM said:

      “The ECB has taken on some €100 billion of Greek, Irish, and Portuguese debt, if I remember the number right. They have capital of only about €10 billion. They want to take on even more debt from the banks, as the banks are using sovereign debt as collateral. The whole process is a way to paper over the fact that many European banks are essentially insolvent if they have to mark to market their Greek debt.
      I (JM) think it is a given that in the near future Ireland is going to tell the ECB that the line item on their balance sheet for €60 billion that says “Loans to Ireland to bail out their banks” should be moved from the line that says loans to the line that says capital. They will simply walk away from the debt. “Here are the keys to your banks. What are you going to do with your banks?”

      €10 Billion capital and McCarthy says that the overall cost of a decisive solution need not be greater than €250 billion ????

      ‘Good luck with that magic stuff, Harry Potter!’.

      • coldblow

        Hi Malcolm

        McCarthy’s 250 bn is, afair, for all the peripheral countries combined, mostly Greece.

        Re Maldin’s suggestion to reclassify ECB loans as capital, didn’t DMcW suggest that just a few weeks ago.

        Heard a Welsh joke on Saturday, couple of people cast adrift in the ocean. “We’re saved” shouted one. “Here comes a ship. The Titanic.”

        • Malcolm McClure

          Coldblow: What did Noonan say to Kenny when he came back from Brussels?
          “Infamy! Infamy! They’ve all got it in for me!” (from Carry On Enda).

          • re “What did Noonan say to Kenny when he came back from Brussels?”

            “I threatened to stop asking for a discount on the bailout interest rate, if they keep going on about us raising our Corporation Tax”

            Craggy Island’s Fr Dougal Maguire in Fr Ted would have done better:)

          • coldblow

            “Friends, Romans…”
            “Countrymen”
            “I know! I know!”

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