June 28, 2011

ECB is merely phoning it in

Posted in Sunday Business Post · 131 comments ·

Walking around Dublin these days, it appears that everyone is on the phone.

It is impossible to stand in a queue or in a public space and not be amazed by the amount of gadgetry and texting and chatting that is going on.

This communication business continues to grow in all sorts of unanticipated ways as more and more people all over the world get connected.

For example, did you know that every minute of every day, 35hours of content are uploaded to YouTube?

It is important for those of us who watch the economy to be aware of what is going on in mobile phone companies.

Reading the economic tea leaves is a crucial part of the economics profession, and most economists have a favourite set of figures.

Mine is mobile phone company results.

Details in a mobile phone company’s accounts tell us more about what is going on in an economy than other more commonly used leading indicators. Looking at the right figures to predict the next moves in the economy is crucial because after all what use are economists if they can’t tell you what is likely to happen in the future?

You’d be pretty dismissive of a doctor who couldn’t diagnose you in advance, but could tell you on your deathbed that you had a fatal disease.

Similarly, economists who can tell you what happened yesterday but can’t tell you what is likely to happen tomorrow are hardly worthy of the title ‘economist’.

What makes the difference between economists? It is not, as economists who didn’t foresee the bust might claim, between celebrity economists and others, but between economists with foresight and economists with hindsight.

As well as a bit of theory, a few rules of thumb, a bit of common sense and some experience, one of the crucial parts of an economist’s armoury is the choice of figures he or she looks at.

For me the mobile company accounts are for fairly obvious reasons important because what is going on today deep inside a phone company will only be picked up by official data a few quarters from now.

By the time that official figure is published, it will be too late to react.

A few weeks ago, Vodafone, the world’s biggest mobile phone company, published its results. (They can be seen on the company’s website.) If the phone company is doing well here now, we are likely to see a pick-up in the economy in the months ahead. If the phone company is doing well here, we are likely to be in a position to pay back some of the money we owe. In fact, maybe we could go so far as saying that if the phone company is doing well here, the IMF/EU deal will succeed.

Unfortunately, this is not the case. Vodafone’s operating profit in Ireland is down significantly because Vodafone has just massively increased its impairment losses in this country to €1 billion for this year alone.

This is a huge figure and it means that Vodafone is now degrading the value of its own business in Ireland so that it doesn’t get a nasty surprise in the quarters ahead.

From a European perspective, the Vodafone results also shed light on why Europe is in danger of splitting in two, between the debtor nations, which are faltering, and the creditor nations, which are doing fine. In fact, the Vodafone results mirror the bailouts and tell us what current EU policy will do to the performance of the periphery.

Here is a quote from the Vodafone results: ‘‘Impairment losses totalling €6,150millionwere recorded relating to our businesses in Spain (€2,950million), Italy (€1,050million), Ireland (€1,000 million),Greece (€800 million) and Portugal (€350million), primarily resulting from increased discount rates as a result of increases in government bond rates together with lower cashflows within business plans, reflecting weaker country level macroeconomic environments.

The impairment loss in the prior year was €2,100 million.”

What Vodafone is telling us is the polar opposite of what the European Central Bank (ECB) is telling us. The ECB is telling us that if the patient takes the medicine, it will recover.

What Vodafone is telling us is that as a result of the medicine, the patient is getting weaker and weaker. Look at the countries where Vodafone is tripling its impairment overall losses: Portugal, Ireland, Italy, Greece and Spain – the PIIGs – the very countries in difficulty.

Who do you believe about the likely next phase of the economic cycle, the ECB or Vodafone?

Now let’s take a closer look at the numbers. If we break down the absolute level of impairment by national population, we can get a sense of just how bad the collapse on domestic demand can be expected to be.

Here Ireland comes out very badly, much worse than Greece. Vodafone has taken a per head impairment in Greece equivalent to e0.71; in Italy the figure is e0.17, in Spain it is e0.64 and in Portugal it is e0.35. In Ireland, the level of impairment is an enormous €2.27 per head.

This is three and a half times worse than even Greece.

I doubt Vodafone has ever raised the level of impairment this high in any country and it is a measure of how it regards the level of activity in Ireland and the resulting collapse in the value of its business here.

Companies like Vodafone don’t see things getting better; they see things getting worse and a country where impairments are rising is not the type of country that can service mounting debts.

The reason why Vodafone is important is because it is at the heart of the economy. Using the mobile phone and the communicating in general is what people do every day, all the time.

The trends spotted by Vodafone now will manifest themselves in published figures for domestic demand early next year.

Significantly, this describes the GNP element of the economy, the one that matters, not the GDP measure of the economy – the one that distorts to deceive.

While GDP grew in the first quarter of this year, GNP fell at the fastest rate ever recorded.

The Vodafone snapshot paints a picture of the world as it is, not as officialdom would like it to be.

As a result of current policy, this economy will get weaker and weaker as the banks cease to be banks and become nothing more than glorified safety deposit boxes for the ECB.

The more we save, the more this money gets stuck in the dysfunctional banks and the less activity there is to generate taxes.

Like the Greeks, we will miss our bailout targets and as the day when the IMF leaves gets closer, the sense of panic will increase, causing capital flight and further asset prices falls.

The Vodafone figures, as well as everything we can see on our TV screens, show that Europe is now split into two camps.

This is hardly the enhanced European solidarity which the ECB was set up to ensure in the first place.

David McWilliams has set up an economic consultancy offering independent advice. www.economicsclinic.ie

  1. adamabyss

    Weird Scenes Inside the Gold Mine.

  2. Fascinating stuff David

    As I keep saying it’s time to lower the lifeboats. I guess that in a year AIB will be gone and capital will leave the country. There is no stopping this thing and you more or less said so yourself in your last article

    Time for people to become detached from money and material possessions. Resistance is futile

  3. Malcolm McClure

    I thought multinational companies adjusted their internal booked costs so that their profits and losses registered in countries where they gained the greatest tax benefit. I guess that is more difficult to do with telecom companies.

  4. John Q. Public

    We would be looneys to change the corporate tax rate. Maybe we should still let the banks go even now. Guarantee deposits of course and set up new banks. No debts on the balance sheets of the new banks and we start again. Too bad if the ECB disagrees, we just say ‘that’s capitalism’ and move on.

  5. Colin

    Its clear many people who are pinned to their collar will cut back on usage of things like mobile phones in order to keep paying the mortgage/rent/college fees. The mortgage is sacrosanct, it is rated higher than food and heating and everything else and must be paid at all costs to save on public humiliation of being evicted and moving back in with Mammy and Daddy.

    I wouldn’t be surprised if all those mobile phone users in the queue were having imaginary conversations, you know, you have to be seen as someone with many friends and all the time with important things to tell them, can’t be seen alone with no one to talk to these days, people might think you’re a loser or some kind of creep.

    Bring back the cornerboys, all is forgiven lads, please stand around with your hands in your pockets and looking around whilst having a chat….anything except the Jedwardesque accents of people who talk a load of rubbish out loud that no one really needs to hear.

    • Malcolm McClure

      Colin: Pat Kenny chaired an excellent RTE program last night between a panel including Brian Lucey and a large and vocal studio audience including many with mortgage difficulties. Perhaps the penny is beginning to drop at RTE that the nation will not put up with them ignoring economic realities for the masses of licence payers IN NE and arrears. Pat Kenny earned his expensive keep last night. I hope we see more RTE fat cats out on the streets discovering what life is like for real people, as opposed to pundits and pop stars.

      • Colin

        Hi Malcolm,

        Yeah I caught some of it last night and it was good. Brian Lucey displayed a lot of humanity I thought. We still need to tease out a lot of details about moral hazard, you heard the email at the end from one viewer, “Pat, should I stop paying the mortgage now and put the money away on the QT?”

      • Deco

        Seen 10 minutes of that last night. I reckon the audience were from Cork, based on the accents. The participants were very direct, and were fairly honest about the financial predicament of the country. One lady pointed out the stupidity of the way the DoSW operate concerning their various schemes, essentially pushing people to act helpless and be as useless as possible, in order to get assistance.

        Was a bit suspicious of the legal eagles trying to push themselves forward as the solution to the problem. Lawyers are good at telling us they are full of heart for the suffering people – if it means they can get some money for themselves.

        In fact the legal profession are actually scelping the taxpayers from the other side. None of them ever launched a constitutional challenge to NAMA, for free, or to any other debacles that suckered the taxpayer in recent years. And now we have the legal profession taking on taxpayer owned/funded banks.

        They never offered their services for free when the banks were being bailed out in DIRECT Contravention of Article 45 of Bunreacht na hEireann. In essence, we could be waking up to find another episode of vulture like behaviour from Ireland’s professional class. A lot of funny business went on, that they refused to challenge. And now they are trying to create a market for a taxpayer funded backed scheme that employs legal eagles to take money out of taxpayer funded banks. Not sure how to get out of this mess. But more jolly schemes for lawyers is not the answer.

        And they might also wish to take time out to have a look at what the IMF had to say about the rates being charged for “professional services” in certain protected sectors of the Irish economy, and the lack of a proper functioning market with reasonable competition between participants in respect of pricing.

        • Praetorian

          Actually the lawyers in question, to their credit, are doing the work pro bono and have set up an organisation to represent people.

          New Beginning

          Your points about the profession generally hold water, money was to be made and some got in a little too deep, for every ying there is a yang.

          Meanwhile in austerity imploding Greece, neoliberalism 101, first you get the country into excessive debt, then you pound the country until it gives up its jewels:

          “Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece’s national lottery. George Christodoulakis, Greece’s special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country’s €110bn bailout debt.

          The private equity bosses gathered in the hotel’s ballroom for the parade of Greece’s national treasures showed little interest in buying anything.”

    • coldblow


      John Waters wrote an article about the use of the mobile phone in public about 8 or 9 years ago. Whereas on the Dart you could, in the odd silence, hear some ordinary conversation still going on, on the tube in London you would usually here complete silence. Then, suddenly, you might catch the warm uninhibited tones of an intimate conversation but this would invariably be somebody on a mobile. Or of course it could be the kind of conversation you describe too. The idea of chatting to the person next to you would of course not arise, probably for the reasons you have given. So instead of ‘enhancing’ the public space the mobile phone succeeds only in degrading it further.

      • Colin

        Hi Coldblow,

        I must search the archives for that piece from John Waters. Seems to hit the nail on the head.

        Regarding London, different kettle of fish to Ireland when it comes to the art of conversation. Read McCarthy’s Bar by Pete McCarthy and you’ll discover there’s a world of difference. Pete travelled around Ireland from Cork to Donegal back in 1999 on his own, and fell into conversation with many people along the way, in a way that would have been impossible to do in England. I remember a former work colleague in London telling me that if someone spoke to him on the train on his commute, he’d immediately conclude that they were a nutter. That colleague’s parents both come from Ireland.

        I agree, mobile phones have only degraded the public space.

        • coldblow

          Yes, he started off in Castletownbere and ended up in Lough Derg. Here unfortunately he slips into a standard ‘liberal’ whine, but a lot of the book is entertaining. I’d say he had a bad experience at an RC school. (As I’ve mentioned here before, I like the bit with the tourists drinking in Durty Nelly’s while the locals went to the fake pub next door. But as that’s Co. Clare I don’t want to be too complimentary.) My brother used to commute to town from SE London and would not make eyecontact with anyone in the morning, while in the evening, at Christmas only, the train would be in drunken uproar. All the same, I have often had more satisfying conversations with English people than with Irish. The latter sometimes seem to be motivated by nosiness, or know-it-all-ness, or just conversing for form’s sake. But it’s hard to say, really.

          In England the northerners seem to talk more, which is fine if you like that, and can understand what they are saying. But then you get the taciturn sort, as in Uncle Mort’s North Country. For him, mobile phones would be “for southerners, hairdressers, tennis players, East German javelin throwers (of both s*xes) and bl*ody estate agents”.

          One of the oddest experiences I’ve had is in a guest house in Llandudno in North Wales. The clientele all seemed to be lower middle class from the North Midlands. Probably non-conformist in religion. The dining room would be packed but you could hear a pin drop. They’d just whisper to each other: Pass the salt, please.

          Then there’s other strata of English society who’d give you a headache.

          I’ve often wondered how birds of a feather flock together, especially pub-wise.

          If I went on holiday with Budget Travel and it was all Irish, as opposed to a leavening of English, then that wouldn’t be a good sign. They seem to act more like a pack then. Not as bad, I would imagine, as 100% French, Spanish or anywhere else (let’s not leave out the Australians), but not ideal. My wife agrees with me. She ought to, it’s her idea.

          • Colin

            Imagine if he was alive today, driving around in his car, listening to talk radio, and tunes into Joe Duffy and hears about Healy-Rae and the 2,000 odd phone calls at premium rates from Parliment Offices to RTE to win a Celebrity TV Competition. Maybe its a good thing this won’t find its way into modern literature.

            If you want to die of alcohol poisoning / bizzare swimming pool accident / falling from balcony accident then Budget Travel are the best choice. Join the pack of mad paddies abroad, and see if you can survive it.

          • CitizenWhy

            When I visited relatives in County Clare we went to local pubs, usually after closing time (often very busy). The pubs had no signs outside that i could see, but some visitors from abroad managed to find them.

        • CitizenWhy

          Have things changed that much in the UK? When I first visited back in 1969 I met many people who enjoyed talking to someone from abroad. I never met any of Irish extraction, except relatives, who did not do Irish things except among themselves. Many of them had married non-Irish foreigners or west country English people for some reason. I must admit that I did not always understand what some of the country people were saying to me but we got along. I thought the English were really friendly. For that matter I thought the French were also really friendly (I could get by in French at that time).


    AIB will offer 2,000 staff ,7 weeks pay for each of service, as a redundancy package.It will cost € 250 millions.Madness.

    • Deco

      Yes, it will cost the taxpayer that.

      Permo are offering something similar.

      Interesting review of Gillian Bowler, former head of Permo in Phoenix Magazine about six weeks back. Captured the essence of her, very well. It seems to be standard practice in Irish Finance, and she is mild compared to her peers, if not a saint compared to some of them.


        Bowler enterd the world of banking relatively late and is more naive than our native spoofers/bankers.Branch managers will get an average €300k pay-off.Seeing as most of them barely scrope past their leaving cert, it’s an outstanding result!If the other banks ditch a similar number of staff, it could end up costing € 600 millions.

  7. Man how my ancestors would spin in their graves if they knew where the FF’ers would eventually bring us?
    Zombie banks a Zombie economy and all presided over by a Zombie government!
    Mind you they probably are spinning in their graves even as we speak because, you’ve guessed it, they also may have become Zombies.
    And I suppose I’m no different myself as I’m destined to join the economically un-dead along with my debt slave citizens?

    This is all a dream isn’t it? Or some B movie? Yeah its a crazy movie where near the end the hero gets to drive a stake through the ECB Heart.
    Movie or reality I think thats actually the only way to end this madness!

    Anyway is there a doctor in the house ?

    ….a Dr.Van Helsing?

    • Praetorian

      It does feel like all of the above, when you add in ‘life’ i.e. personal tragedies, health problems, marriage stresses, accidents and a myriad of other things, you touch on the essence of a human volcano which simmers but rarely features in any cold economic statistic.

      Seems self-evident that people are cutting whatever they can, building savings in fear of being made redundant, the knock on effect is quite pronounced with politicians largely clueless as to what to do next.

  8. Stephen

    One must be very careful before reading too much into a single companies perspective on risk. Vodafone may well me experiencing changing consumer trends, new competition from new technologies (skype etc) and perhaps we had over spent (as a race) on telecommunications because we like to talk more then our European neighbours. It is dangerous to take too much inference from one single source, even more so publicise it as some sort of given. Does o2 bear this out, does Microsoft, Dell and other large globally positioned organisations. Maybe then you will have a trend that is worth noting. You may be right but you also may be wrong, please add caveats to your arguments.

  9. Juanjo R


    Your decimal places are in the wrong places – I think – your maths certainly don’t add up.

    Quote from you article above “Here Ireland comes out very badly, much worse than Greece. Vodafone has taken a per head impairment in Greece equivalent to e0.71; in Italy the figure is e0.17, in Spain it is e0.64 and in Portugal it is e0.35. In Ireland, the level of impairment is an enormous €2.27 per head.”

    Should that not be €71 per person x population of Greece 11.2 million = 800 million euros ( impairment figure ) for Greece or so….and so on?

    • coldblow

      I think you are right, Juango.

    • diarmuidmac

      it’s not the population Vodafone are counting, but their customers /subscribers i believe ?

      • Juanjo R

        According to Wikipedia ( I know its wikipedia so touch wood ) Vodafone has 2.3 million subscribers in Ireland, 4.2 in Greece, 15.8 in Spain, 5.1 in Portugal and 22.8 in Italy – market share percentage appears to be a significantly higher here than elsewhere.

        So thumbnail calculations would put Vodafones Ireland’s debt impairment at 400(ish) euros per subscriber.
        Greece is at 200 (ish)
        Spain is at 200(ish)
        Portugal is at a mere 70(ish)
        Italy is at a very mere 40(ish)

        We are still way out in the lead!

  10. EOC

    I think your points are valid with respect to the wider economy and how Vodafone’s figures may be representative. However, you need to clarify what you mean by “impairment” as it may not be valid to use “impairment cost per subscriber”.

    There is a boom going on in the mobile industry right now that is not reflected in Vodafone’s stats. There is a flow of customers leaving the more expensive operators in search of more value with other operators. The bigger operators have to try to stem that tide with better offers, leaving lower margins as seen in Average Revenue per User stats. This must affect Vodafone’s figures. On top of that, Vodafone invested heavily in their network over the past few years and I’m not sure how that fits in to “impairment”.

    But your point is valid and Noonan’s call to “go out and spend” is laughable as he takes more and more out of the customer’s pocket. How does he expect them to “spend”…


  11. 10 Questions for Dr. Andy Storey, June 21st, 2011

    My comments to readers are in [ brackets ]

    The independent audit will support people in Ireland to form an opinion on where the responsibilities lie with regard to the Irish debt crisis,” said Andy Storey, Chairman of AFRI and politics lecturer in UCD. “It will provide valuable lessons that will guide debt justice campaigning in the future and be shared with civil societies of indebted countries around the world.

    Thanks a lot for you time Andy! Besides your role as the chairperson of AFRI, a group that promotes debate on human rights, peace and justice issues, in particular with reference to violent conflict zones, and your expertise in social policy, you lecture at UCD, College of Human Sciences – School of Politics & International Relations, you are also involved in DDCI, the Debt and Development Coalition Ireland.

    x x x x

    On May 4th 2011 an independent debt audit was launched by DDCI concerning the odious debts situation in Ireland. You are part of the supervisory process that supports the researchers who are lead by Dr. Sheila Killian, a senior Lecturer in Accounting and Finance at University of Limerick, commissioned by DDCI, AFRI and UNITE to establish the status of the Irish debts.

    Law Prof. Robert Howse wrote in the 2007 UNCTAD publication ‘The Concept Of Odious Debt In Public International Law’:

    With respect to obligations of debtor States to private, i.e. non-state, creditors, there is no established rule of international law that requires that these be continued in the case of political transition.

    In Ireland, legislation was rushed through the House by a parting FF/GP government, which in essence enabled the IMF and EU-Commission to prescribe austerity demands and force further debts, with the EU applying punitive rates on top, onto Irish citizens. The opposition parties FG and Labor were given a mandate on February 25th and continued EU/IMF policy implementations. It might be worth noting that besides the EU-Commission and IMF, the ECB has also a strong presence in the ongoing meetings in Dublin.

    A referendum, like it was held twice now in Iceland on matters of private banking debts, was refused to the public in Ireland, instead the political class took it upon themselves to commit billions of taxpayers money to Banks that they claimed to be systemic, like Anglo Irish Bank and on top in November 2009 they passed the NAMA legislation.

    To date, more than 46 bn debts were forced upon Irish citizens. The State has injected this sum into Irish Banks. The result of the dubious March 2011 stress test foresees a further 24 bn to be required, whereby 4-5bn of that might come as a contribution by subordinated bondholders.[ Comment: Hat tip to NameWineLake ] Of the 46bn already injected, some 16bn is in cash and 28 bn in promissory notes, IOUs that are expected to be paid off over 10 years.

    x x x x

    What is the status quo of your Irish investigations, when do you expect results to be published?

    I cannot talk about the results to date, but in approximately two weeks from here on, the first phase is finished and we will publish the preliminary findings on our website and through other outlets.

    However, the process is not finished with this first publication in two weeks, it is an ongoing process, and the next step is to publish the final results in autumn, which will be announced in a press conference.

    It is very important to understand that this is a politically independent research, the mission is to establish the facts about these debts. We are not judgmental on the findings in this report, this has to be part of a political and/or public process that might follow, but we just establish the facts as a basis for a better understanding, we ask the following questions for example:

    What is the overall scale of the Irish debt? To whom is the bank debt, that was transferred to the taxpayer, owed? When was this debt contracted? Specifically, was it before or after the government’s bank guarantee was issued?

    It goes further, when does the debt fall due for repayment, and how much has already been repaid, and to whom? How much of the debts is senior, guaranteed, and subordinated, and what are the legal implications from these different categories?

    You see, as politically independent researchers we are exclusively concerned with the fact finding process and this will support the public as well as policy makers to gain a better understanding.

    I know you were in Greece not long ago, are you involved in the debt audits there as well?

    No, I am currently not directly involved in the Greek debt audit process, but I wrote an article together with the Greek economist Costas Lapavitsas that was published in the guardian. [ Comment: He is the Gentleman that appeared in the Greek documentary Film DEBTOCRACY ]

    We explained how debt audits can lift the fog of secrecy that makes all these debt transfers so very difficult to understand for the public, a public that feels humiliated by these events. The film DEBTOCRACY has been watched on several Internet sites over a million times and is one of the great results of this process that launched in Greece last March. Of course, to no surprise the film was denounced straight away by a Greek Minister for equating Greece with Latin America.

    German citizens and other core European states are ill informed when they believe they are bailing out feckless Mediterraneans and Celts, these sentiments are fed by the mainstream media, and at the same time fear is induced in citizens on any default scenario. Successful default examples from history are denounced as invalid. [Comment: Statements such as Ireland is not Iceland, There is no other way, Argentina is a Banana Republic etc. ]

    Debt audits help citizens to better understand that the debts imposed by EU and IMF are bailing out banks that engaged in profitable and irresponsible reckless lending.

    The Greek debt audit process is different from the Irish process. Greece is more concerned with public debts incurred by military expenditure possibly connected to corruption, or the costs that exploded for the Olympic games.

    In Ireland we look mostly at the private banking debts that are transferred to the taxpayer.

    DDCI is a politically independent Organisation. Do you have the support of Irish Government Officials and access to DOF personal and files to evaluate the contract situation on Irish debts?

    Speaking on behalf of AFRI, at the moment we do not seek the support of DOF, all the preliminary research is done in the pubic domain that provides a rich source of Information on these matters. For the next phase we will seek further support in a variety of ways, such as the Freedom of Information Act, or questions raised in the House by means of parliamentary questions.

    Do you consider the so called bail outs that are imposed by the EU Commission and IMF on Irish citizens to be part of the odious debts?

    Yes, under certain conditions. I would say that a loan that is given to Ireland to finance public needs and social services are certainly legitimate debts. However, debts that are imposed to serve private Bank debts should be considered odious.

    This is why the audit is such a useful tool, to make a clear distinction between legitimate and odious debts.

    After you established the amount of odious debts in your final report, what needs to happen next from a legal perspective? After all, are you not in urgent need of a strong public support to demand from the Irish Government repudiation of these debts?

    Our team has experts in finance, economics and law, hence we draw on legal expertise as well. However, what happens with these debts afterwards remains a political decision.

    It is part of our motivation to offer the public sphere a deeper understanding on these issues, and only an educated public will form less influenced opinions on these matters. The public opinion is crucial for any political decision process.

    Would it be an overstatement to say that the Irish public media, both broadcast and print press, are avoiding to report on your work?

    Let me give you an example, recently the Irish times ran a series of articles on Argentina. They can be summarized as scare mongering. Default = Disaster [Comment: Remember the reactions on David’s recent Argentina article in certain circles? It was exactly the same!]

    Alan Cibils is the chair of the political economy department at the University in Buenos Aires, the Universidad Nacional de General Sarmiento.

    He offered his opinion piece to the Irish times providing a different view from the inside perspective of Argentina. The IT refused to print it. He then offered it as a letter to the editor, it was also refused. [ Comment: Alan Cibils views in NYT: http://www.nytimes.com/roomfordebate/2011/06/19/draft-the-imf-greece-and-the-argentina-option/lessons-from-argentinas-default ]

    Another example is Morgan Kelly’s piece in the IT where he pointed to T. Geithner’s involvement on the Irish situation. Has this been followed up in the media or in politics? There was no in depth follow up to this revelation.

    Yes, we also experience hurdles to find support or publishing in the mainstream media landscape.

    In your opinion, are the prescriptions of severe austerity, demands of privatisation and sale of public assets that are been forced on entire Nations by the neo liberal dictate undemocratic?

    Yes, I do consider it undemocratic! Just take a single example, the promises that were made before the elections concerning renegotiations with EU/ECB/IMF.

    Was the Irish public not let to believe that a new government would take a very strong position on the conditionalities attached, and what are the results to date?

    [ Comment: When the people are refused a referendum on matters that will effect all of us for more than a decade to come, and cause our children to be forced to leave Ireland, how can this be considered democratic by any stretch of the imagination? ]

    RTE PRIME TIME broadcasted a excellent series on austerity that explained in epic pictures the inhuman hardships caused to the most vulnerable people. This report was picked up afterwards by THE FRONTLINE, asking whether we should not stop all aid to underdeveloped Nations and rather use the money here in Ireland instead. I consider it cynical and a deliberate distraction, public anger is steered away from the political class that agrees to EU/IMF policies and the real culprits of this heist, the Banks and their speculations. I observe the same manufactured media consent in Germany and France. Do you share similar observations?

    This is what I would describe as part of the divide and conquer strategy. The choice presented to the public here is to continue to give aid to the poorest people or to stop this aid.

    It deliberately excludes other choices.

    The real choice is to look at all the private banking debts, they are the problem and not the aid that Ireland is providing to other countries.

    Could all this be described as a financial coup d’état? After all, the Irish government is manhandled and acts as compliance managers for EU/ECB/IMF demands. Even the discussions on punitive EU interest rates are not backdated, but only deal with future payments.

    We see the very same policies that brought us into this mess are being rammed through again, the transfer of assets into private hands are part of this coup d’état.

    While the people are burdened with the private banking debts, huge profits will be created for corporations through forced privatisations.

    If you could address the entire Irish nation this evening on six one news with an unedited appeal, what would you say?

    Look at Spain and Greece, get out on the streets, mobilize the people and show the Irish elite that there is a very heavy price to pay. All these events are time critical, and the payments to bondholders and Banks continued throughout the year. Currently, all they see is that the political price to pay is a total bargain, it cost them next to nothing to continue the implementation of even more austerity which is inevitably on their agenda with the next budget. [ Comment: The Muasher doctrine applies! As long as the political prize to pay remains as cheap as it is to date, the situation for Ireland will not improve. ]

    I would have more questions of course, but we only had a few minutes today and I know your schedule is very tight.

    Thank you very much for your time Andy, please send my regards to your team, we all owe you for your relentless efforts!

    • uchrisn

      Dr. Storey talks sense and its an interesting initiative. Its also interesting the Irish times wouldn’t print what the New York Times did.

      • Deco

        No, but they will publish every pointless cliche from Suds, where Suds is patronizing the Irish people and encourating the people to commit Ireland’s state system to bailing out G-Sucks and pals…..

    • CitizenWhy

      Thank you for this excellent comment.

    • Very interesting indeed!
      Thanks Georg

      • Praetorian

        The guy in my house is a professional, had heard of the word ‘elite’ but didn’t know what it actually meant. I thought if this mainstream educated and not unintelligent person didn’t know the meaning of the word ‘elite’ what about the broader population, do they have any idea of the context in which they are operating in?

        People talk about the Irish inability to march, protest, do a Greece? Well, a big part of any protest movement is an informed populace, it seems to me one of the elephants in the room is a seriously dumbed down Irish population, poorly served by its education system and most certainly a quite appalling media (State and commercial in particular print, the broadsheets in Ireland are extremely low grade, the Irish Times which is regarded as being streets ahead intellectually doesn’t hold a candle to continental European commentary).

        Greece has a vibrant left community and intellectual culture especially in Athens, Dublin has Temple bar, remember Samuel Beckett walked away from Trinity College and eventually found himself with a small part in the French Resistance, he rarely looked back to a place with ‘too much God’ and not enough independent critical thought. We pay the price for that now.

        A nation of sheep begets a government of wolves ~ Edward R. Murrow

        • adamabyss

          As previously reported on here, my cousin’s husband (nice chap) was working in the NAMA building for a few weeks before Christmas, installing (or repairing? – not sure) the air-conditioning systems. He had never heard of NAMA though, had no clue what they were set up to do, nor had he any interest. His eyes glazed over in less than ten seconds when I attempted a basic explanation…

          • Dorothy Jones

            Smiles! Adam, I read the draft legislation, the commentary, the enactment, attended [expensive] seminars on the legal implications, consumed a healthy portion of namawinelake each day, absrbed media commentary, included explanations of NAMA in lectures…….and it’s still difficult ‘to get your head around it’!! Anyway, you may be aware of my views on NAMA at this stage, but do you know something….in my [humble] opinion, your friend is better off not knowing….!!

  12. coldblow

    There was dismissive talk about the ‘celebrity’ economists from the start, as far as I can tell, but it seemed to become louder in recent months, possibly because some now see that their earlier positions have grown untenable? Speaking as an extremist burn the bondholder hothead I find myself wondering if the economic ‘community’ has achieved anything except to waste valuable time. Although it now seems clear to all what is going on (although interpreations might vary about the motives of the players) there still isn’t any public acknowledgement of the situation and no honest debate about the best way to sort it out. (I was looking at a recent thread by Namawinelake – “A nod is as good as a wink etc” referring to Noonan’s recent comments implying that the ECB would cut off support for our banks if we burnt holders of ‘odious’ bonds – where he said that policy is still being conducted “in the shadows”.)

    I’ve nothing against the economists but their debate doesn’t seem to have done much to improve the situation. Perhaps I’m being unfair.

    Hudson subtitles a recent post “Only the ‘Crazies’ get the Bank Giveaway Right”. He’s referring to the loonier elements of the Republican Party in the US, but perhaps it is valid in a wider sense. Just wondering.

    By the way, I note that in his latest article Michael Hudson is alwo calling for national referendums:


    “The most effective tactic is to demand a national referendum on whether to accept the ECB’s terms for austerity, tax increases, public spending cutbacks and selloffs.”

    Here’s a para at random:

    “Socrates said that ignorance must be the root of all evil, because no one deliberately sets out to be bad. But the economic “medicine” of driving debtors into poverty and forcing the selloff of their public domain has become socially accepted wisdom taught in today’s business schools. One would think that after fifty years of austerity programs and privatization selloffs to pay bad debts, the world had learned enough about causes and consequences. The banking profession chooses deliberately to be ignorant. “Good accepted practice” is bolstered by Nobel Economics Prizes to provide a cloak of plausible deniability when markets “unexpectedly” are hollowed out and new investment slows as a result of financially bleeding economies, medieval-style, while wealth is siphoned up to the top of the economic pyramid.”

    • CitizenWhy

      Perhaps universities should make Economics a branch of its Communication/Public Relations/Sales programs. A science? Ridiculous.

      • Deco

        The problem is that too high a proportion of the third level population gets trained in courses that basically amount to deceiving the rest of the population.

        On http://www.marketoracle.co.uk there is a US Societal Commentator called James Quinn who summarized the “jobs” that were created in the US economy in recent years under four categories. I cannot name them, because I forget.

        In essence, he was pointing to the hollowing out of real jobs. He also showed this as coming from the FIRE economic model (check Eric Jansen in itulip for a definition of what this means), as advanced by Wall Street, The Fed, the US media.

        Another description was also available at the same site, from a different author. The job categories were all in the Services sector. They amounted to
        “selling stuff”,
        “financing the buying of stuff”,
        “delivering stuff”, and
        “promoting/endorsing stuff”.

        The interesting bit is the missing bit. The “making stuff” bit. That has been outsourced. Mostly to Asia. That is where the money is flowing. The rest is passing money around between people in a growing state of insecurity. And these people are all supposed to have confidence in the FIRE economy model, be mad busy runing around getting nowhere, and feel as if they have money to spend, even if they don’t.

        I reckon that this is what we will see here next. A lost decade, but not officially described as such. In fact described in completely glowing terms so as to make it impossible to fathom.

        • Praetorian

          Manufacturing was destroyed in the US, with it went labour power to negotiate terms and conditions and Trade Unions were reduced to talking shops and have nowhere near the influence they have in the UK, which is currently being curtailed using the courts.

          Western economies (with Germany one of the big exceptions) were financialised, basically ponzi schemes, with mytical money and property sectors (refinancing houses, investment houses and all the other nonsense for greedy aspirants). Fuelled by a media that made some cash off property programmes and make overs of people’s living rooms which you could hardly swing a cat in.

          In the US, unemployment is still rising (despite the inadequate Obama stimulus, might explain why so many of his economic team jumped ship, reputations had to be saved). Job creation occurred primarily in the so called ‘service’ sector, where the pay isn’t great, employee rights almost non-existant and job insecurity high. The advent of ‘tent’ cities and growing numbers on food stamps and seeking social security (the little that can be found) is resulting in what some commentators cite as the ‘third worldisation’ of developed countries. Developing countries for all of their problems have one advantage, closer family unit and social fabric which has broken down in the individualised, consumerist, atomised West (all you need is a laptop and a credit card). Maybe citizenwhy can shed more light on all this.

          Jobs are increasingly outsourced by multinationals to low wage, low corporation tax countries (the race downwards), corporate profits rise while incomes shrink but the drop in disposal income has hit consumer spending which in turn is seeking a real war of attrition for high street chains (just look at the news coming out of the UK), so this orchestrated recession may end soon because it is beginning to gobble up those who engineered it but indebeted countries (or the periphery) will go on feeling the pain for some time to come, with Germany emerging in the European context as the master of the house (Germany just signed €15 billion in deals with China today, the UK managed just €2.3 billion, so who is being outfoxed and by whom?).

          When you look at Ireland in the context of the above, it is simply not at the races, but surely it is in contention for the Olympic medal in talking itself a great game given the range of salaries justified on the back of such talk.

        • Juanjo R

          Lost generation? rubbish….they will be quite easy to find – they will be living under their parents noses until they are forty…

        • “And these people are all supposed to have confidence in the FIRE economy model, be mad busy runing around getting nowhere, and feel as if they have money to spend, even if they don’t.”

          This is what I was getting at when I said that resistance is futile

          A very sound observation Deco. I have felt the same sentiments for about 20 years. I saw first hand the effects of Thatcherism where in central Scotland the manufacturing base was depleted thanks to neo-liberal policies. I got the message at a very young age that Tories didn’t like working class people like me and that in fact they hated us

          Glasgow and Lanarkshire used to be the industrial powerhouse of Scotland and we made Ships, Locomotives and Steel which was exported all over the globe. There were also smaller businesses which supplied things like instrumentation gauges for the ships and the locos. If you go into any pub in England which has a maritime theme and look at the old brass gauges on the walls you will see that a lot of them were made in and around Glasgow

          There is a sense of pride to be found in making things and there is no more satisfying feeling in the world when you stand back and look at something you made and saying to your self “I made that”. The money doens’t come into it

          Most people spend their lives getting nowhere except perhaps in the material sense. They might pay off the mortgage and relax after retirement but is does this really equate to ‘success’ and a recipe for a fulfilling life? I definitely think not especially when you consider where the profits may have came from to fund the pension

          It is experience that counts in life and not the pursuit of material symbols of ‘success’. These are only baubles and you cant take your money with you when you go. Better to experience life in the now and have many fond memories to look back on when the young nurse comes over to wipe that stain from your bottom lip in the retirement home

          • We have a lot of foreigners living in places like the North West and many of them came to Ireland for reasons that have very little to do with the pursuit of power, wealth and possessions

            A lot of us were shaking our heads during the boom wondering why so many people were running around like headless chickens spending money that was not theirs to spend. We now see the results. Many lives forever ruined thanks to debt and misery. Welcome to Micabwer Country

            Those of us who did other things during the boom such as keeping a level head and working on our personal development are far more richer for having given thought to what we wanted to like as people in 10 years time

            I wonder how many people thought what they would do to earn a living once the boom was over. Many of these ‘professionals’ we talk about on here are screwed because they never learned any basic survival skills and are helpless without their profession

            Someone who can cut hair or mend a broken lawnmower is in a far better position than an unemployed estate agent for example

          • Here is a simple philosophy

            Forget the doom and gloom and do something every day which makes you feel human. Like taking the wife and kids to a park and having fun

            Enjoying life despite all the misery out there gives a middle finger to those who don’t want to see us being happy

            This depression might break the hearts of some people but it will never break mine. That is because I am Clyde Built and proud of it

            Have a nice day guys

          • Deco

            Forget the doom and gloom and do something every day which makes you feel human.
            A lot of truth there.
            Thanks. A1.
            We are more than just “consumers”.

  13. uchrisn

    The mobile phone data is an interesting indicator. The interest rate on government debt and unemployment are also important indicators and both at historic highs. The Irish people seem content to carry on regardless with the no-brainer of gifting money to failed banks, all realestae owners (through NAMA) bondholders and CDS sellers despite these indicators.
    We’ve gone so far at this stage we may as well just exaggerate the submission to embarrass our abusers.
    Why don’t we publicly offer to give the whole country and all its savings to a few wealthy Irish real estate owners, the ECB, IMF, and domestic and foreign banks.
    We can then rent back the houses at a cost just below our salary and live like the good old days in the 19th century.

  14. dwalsh

    I think the difference in economists is mostly how and by whom they are employed. The economists who were the cheerleaders of the destruction of the global economy were employed by companies making gigantic profits from the process; and they were reaping huge personal bonuses to play along. Thinking and talking rationally would have cost them their comfortable jobs. What was wanted was rationalisation — not reason. It was the same for the various market regulators; the word from on-high was clearly ‘look the other way or look for another job’.
    It’s the same with the hard sciences too. Most scientists are employed by industries which are driven by the irrational forces of the ‘market’ (bowing head in awe) — profit. Truth is a luxury such outfits cannot afford. Just enough truth to make the gadgets work; but not so much as would bring real order and true progress to the human world in the long term. That’s the way the human world functions — vested interest.
    A new era is dawning when sectarian self-interest will no longer be viable. The world is no longer an infinite field of resources in which to compete for expansion and exploitation. We have reached the limits to growth. At least the limits to the kind of irrational greed-driven growth that has characterised much of human development thus far. We need new thinking and new systems of production and distribution. A new kind of economy and civilisation. Capitalism as we have it now cannot deliver the next stage of human civilisation.

  15. CitizenWhy

    Perhaps the Catholic Church could regain some ground in the EU peripherals by having the Pope come out strongly in favor of debt forgiveness for the odious debts imposed on the peripheral countries. “Forgive us our debts as we forgive those … etc.”

    • dwalsh

      I dont know but I bet the Vatican has a huge stake in the debt through its own banking interests. It’s probably one of the sacrosant senior bondholders. Furthermore, Rome does better business when populations are stressed out and impoverished than when they are content.

  16. Deco

    Of course a big factor in the Irish statistics is whether or not the independent deputy for Kerry South is included in the Vodafone figures. According to recent reports there do be a lot of phone calls made in his favour :)

    I would have expected that mobile phone talk time would be the last thing that would have been impacted by a crisis in this country. It has got to the stage that if you go to a large gathering (concert, sports event, or even just the beach on a summers day along the East coast) that you are exposing yourself to a massive increase in microwave radiation. No idea yet if it harmful. Perhaps if the truth by told, it might make people apprehensive about being in crowds. As recent history has shown when Irish people form a crowd all sorts of stupidity and irrationality follows. (This may affect other peoples also, but I am not able to draw a conclusion on any).

    The mobile phone age – everybody busy talking on the mobile – and a lot of it, based on the results that we are seeing in terms of “we are where we are” – clearly indicating that all that talk did not make anybody better informed.

    If anything, there might be a cogent argument to make that the intellectual state of the nation dropped as a result of more noise, and less concentration on what was being said. That provided with the new gizmo, a generation was provided with the opportunity to make absolutely no sense whatsoever, and be heard making no sense whatsoever.

    The Knowledge Economy – another buzzword that not enough people understand deep enough.

    • wills


      All economy is a knowledge economy. This notion of a *knowledge economy* is quite simply a con job.

      • CitizenWhy

        Knowledge economy in the broad sense is supposed to emphasize the full range of the T in the Macro-Economic development model. That broad T values any increase of knowledge of any kind (from improved farming to auto mechanics to science, etc.), and any sort of discovery, application or conveyance of knowledge. But somewhere along the lines “knowledge economy” came to mean math. economics and technology. And the promoters of the “knowledge economy” began to devalue the other factors other than Capital: G = Government spending, C – Capital (cash for investment, physical equipment, factories, roads, schools, hospitals, etc.) and L – Labour (everyone with a job)

        In the traditional model all the other factors are supposed to increase the wages and assets of everyone in the L category. Now “meritocratic” knowledge economies are designed to increase wage and asset inequality, move more and more into the Capital category (real estate development, for instance), and multiply the wealth of top earners while stagnating the wages and assets of others.

  17. Deco

    Give it a few months, and this is the type of nuanced language that you will hear here.


    We know that it is easier get a buyer for the ESB or Bord Gais, than to get a buyer for RTE, CIE or FAS.

    And then we have Bertosconi in the background as part of an operation that are interested in Coillte….

    The most intelligent thing to do with Coillte would be to sell small parcels of it to people on a drip drip basis. Basically, Irish people will be able to invest their own money in owning Coillte. Perfect way to stick up two fingers to the Ditherer.

  18. thejeckel

    David, I’m a big fan of yours however you can be prone to exaggeration at times. Taking one companies results & not really explaining the results or asking someone else to confirm your interpretaion of the results is a little crazy, and frankly dangerous. The old adage of ‘you dont know, what you dont know’ springs to mind.

    The second thing that is starting to irk me a little having recently started to read more of your stuff, is that you are great at throwing mud – but we need solutions right about now.

    It’s great to look back and say I forecast the bust – but saying this wasnt much use then, and it isnt much use now either. Back then, I remember your negative outlook when they started giving 100% mortgages but I dont remember a sound suggestion as how to fix it. So while I understood and agreed with your outlook, I felt exasperated as you didnt provide direction nor garner support for your direction.

    Now today, I still dont know if you think we should return to the punt or not?! or are you saying we should simply use this as a threat to get a lower interest rate from the ECB?

    You remind me of a movie scene where the viscious guard dog is at a loss to save it’s beloved owner from been murdered, barking visciously away, but powerless because its chained to the fence. Spitting venom & outraged by the obvious injustice unfolding before its eyes.

    Unleash those chains David, and stop sitting on the fence when you are unleashed.

    • paulpr

      I do remember David’s advice.
      He told the Irish population to stop buying overpriced houses & keep renting.
      Seems pretty sound

  19. Greece arguably has a lot of fat to cut out from a larger black economy and its dysfunctional fakelaki public service, though they are doomed to default.

    Our fat has gone with little to give.

    Vodafone results tell it all, good call on those, business is hanging on by its finger nails in Ireland.

    We’re crash landing as we speak, Titanic times ahead!

    • Deco

      { Our fat has gone with little to give. }

      I am not sure about that. The Dail is unable to find out who called a pay per call number for a celebrity competition with Pravda TV, 3600 times, and are unable to prove that it was in any way related to one of the contestants. This indicates zero cost control there.

      Rody Molloy, Ditherer, Calamity, Cowen, the PD ministers, all ran off with mega pension deals before their time was up. There are 120000 people in the HSE, and it seems that there is uncertainty as to what many of them actually do. Then we have public tenders that are a joke. Then there is the bill for “professional services” which is always the most expensive per hour in Europe. I could continue, and I am sure that you get my drift.

      • Deco,

        Accept your point. You leave out the glaring possibilities inherent in the taxation of wealth in this country, higher taxes for the rich also a grab for savings of some sort. But I was referring in the main to
        an imaginary point where even with these ‘reforms’ of the tax system including the cutbacks in services/loss of jobs that trimming the public service would entail, the end result of all these changes would merely make our problems worse, drive our GNP lower and contribute to a worsening of deflation, more emigration, more unemployment.

        The following article is interesting in that it is a critique of the Krugman position implicit in my own arguments above.

        I believe Krugman is correct, but its also useful to understand where the ‘confidence fairy’ ‘growth tooth pickers’ ‘ex tyrannosaurus rex celtic tiger now ostrich head-in-sand’ arguments come from :


        • Reforms of the tax system with greater burden shared by the rich, more value from the public service, All Good, but not good enough to avoid default and extreme damage to GNP because of our ill fated decision to pony up for the banking black holes on top of the fiscal deficit surgery. IL&P require €3.8 bn before July and will join the list of nationalised banks. Already €180 ml budget shortfall in HSE for this year O Reilly is stating will not be funded by government, expect mainline services to be hit hard next year.

          • Deco

            if only the tax anamolies could be resolved.

            Personally I don’t see the point in the various tax free shelters – artists (apparently Bertie Ahern’s autobiography qualifies him as one), the horsey sector, certain property investments, and so on.

    • wills


      The black economy in Greece is all insider s.

      • Wills, my understanding is virtually everyone is on the take in Greece. Fakelaki is part of most interaction between public servants and the public they serve and the system is designed to use archaic methods to increase such interactions rather than reduce them with electronic automated payment systems etc. Insiders do it big time with tenders for public service projects, shipping, construction, you name it. If the system is corrupt, how does the IMF/ECB do business without your money disappearing into the swallow hole:) ….

        • Greeks don’t pay tax historically because usually it was being paid to an occupying force i.e. Germany during WW2, who can blame them, now they are being occupied by international banksters….just as we are.

          Don’t pay your TAX!!!!

          Take your money out of the banks and crash the PONZI BANKS!!!!

          • CitizenWhy

            Greeks not paying taxes is a more complicated story. Their culture is akin to an Arab culture, based on family and clan and family businesses with the government looked upon as an intrusion or something to be exploited for personal gain. Such a system is able to survive through the appearance and disappearance of various governments but is also easy for a foreign force to dominate.

          • Praetorian

            I think this issue around Greeks not paying tax needs to be clarified.

            A Greek medical consultant, and president of the Doctors Union pointed out that his monthly salary is €1500 per month, he said 90% of Greeks pay their taxes, public workers like him pay it at source, the problem is the Greek elite (political & business), the wealthy do not pull their weight and the government refuses to tackle them.

            This gets lost in the narrative, with one media commentator making quite racist comments about the Greeks. The reality for the majority of people in Greece is very low wages and daily struggle, that is why they are on the streets because they know what a 15% cut in salaries, increased taxation and cuts to public services means for people.

            The Greek taxation system is not equitable and austerity is also being applied in a most appalling and counterproductive manner, after all this crap is dished out, the Greek government will still default, they are flogging their jewels now to raise a paltry $50 billion when their debts are in the hundreds of millions. The privatisation drive fits the neoliberal agenda. This is very much a financial war against labour and the first battle is being fought in Athens but people ultimately hold the cards and can bring this government down, threaten default and the eurozone, so I expect some negotiated solution but only if the Greeks stop the government in its tracks because this current exercise is pointless.

          • Praetorian

            Again, Al Jazeera has done some excellent reporting on Greece, really teasing out the issue.

          • CitizenWhy

            I agree with Praetorian. When the wealthy rule and exploit all others you need a culture tightly based on family and clan to endure.

  20. thirdeye

    Well it shows ET couldnt phone home from Ireland to where ever in the universe as the mobile providers may not be in existence in the irish market may be extreame but uk and other non eu banks have cut dramically their exposure to euro zone countires as fear of contagion.I think what is shown on the media in all forms is the slow break up of the euro currency in its present form.Greek default you may see the Uk making plans to force the EU to allow an option for Ireland to leave the euro as it may bring down the Uk economy due to Uk banks and financial exposure to Irish markets.

  21. wills


    Article of course presupposes the ECB wants the economy to bounce back into gear and get going again.

    But it does not.

    The ECB, otherwise know in reality as the Bundesbank is only interested in running a Euro pOnzi scam. And prepared to do whatever is necessary to keep it going.

    • CitizenWhy

      I think the ECB wants the economy to bounce back. But it does not want to do what is required – an end to Irish bank bailouts), writing off bank debts. As David says the loans to pay the bank debts need to be converted to capital to be put to use capitalizing a sound bank. I also believe that the ECB is desperate to fool itself about the problem, choosing instead to hew to a doomed course. Like a lot of us when we are on a downward spiral. Their scheme to coddle the German banks will not work in the long run.

      • wills

        Let me be clearer,

        The ECB, or, rather the Bundesbank, want the economy rebounding under their control of the economy. Until then they are prepared to carry out their machiaveillean practices to preserve their power and keep the euro pOnzi scam going.

  22. goinghome

    Do you ever get the feeling of being divided against yourself, as in Stephen Leacock’s story?

    – When I go into a bank I get rattled. The clerks rattle me; the wickets rattle me; the sight of the money rattles me; everything rattles me.

    The moment I cross the threshold of a bank and attempt to transact business there, I become an irresponsible idiot.

    I knew this beforehand, but my salary had been raised to fifty dollars a month and I felt that the bank was the only place for it.

    So I shambled in and looked timidly round at the clerks. I had an idea that a person about to open an account must needs consult the manager.

    I went up to a wicket marked “Accountant.” The accountant was a tall, cool devil. The very sight of him rattled me. My voice was sepulchral.

    “Can I see the manager?” I said, and added solemnly,
    “alone.” I don’t know why I said “alone.”

    “Certainly,” said the accountant, and fetched him.

    The manager was a grave, calm man. I held my fifty-six
    dollars clutched in a crumpled ball in my pocket.

    “Are you the manager?” I said. God knows I didn’t doubt it.

    “Yes,” he said.

    “Can I see you,” I asked, “alone?” I didn’t want to say “alone” again, but without it the thing seemed self-evident.

    The manager looked at me in some alarm. He felt that I
    had an awful secret to reveal.

    “Come in here,” he said, and led the way to a private
    room. He turned the key in the lock.

    “We are safe from interruption here,” he said; “sit down.”

    We both sat down and looked at each other. I found no
    voice to speak.

    “You are one of Pinkerton’s men, I presume,” he said.

    He had gathered from my mysterious manner that I was a
    detective. I knew what he was thinking, and it made me

    “No, not from Pinkerton’s,” I said, seeming to imply that I came from a rival agency.

    “To tell the truth,” I went on, as if I had been prompted to lie about it, “I am not a detective at all. I have come to open an account. I intend to keep all my money in this bank.”

    The manager looked relieved but still serious; he concluded now that I was a son of Baron Rothschild or a young Gould.

    “A large account, I suppose,” he said.

    “Fairly large,” I whispered. “I propose to deposit
    fifty-six dollars now and fifty dollars a month regularly.”

    The manager got up and opened the door. He called to the accountant.

    “Mr. Montgomery,” he said unkindly loud, “this gentleman is opening an account, he will deposit fifty-six dollars. Good morning.”

    I rose.

    A big iron door stood open at the side of the room.

    “Good morning,” I said, and stepped into the safe.

    “Come out,” said the manager coldly, and showed me the
    other way.

    I went up to the accountant’s wicket and poked the ball of money at him with a quick convulsive movement as if I were doing a conjuring trick.

    My face was ghastly pale.

    “Here,” I said, “deposit it.” The tone of the words seemed to mean, “Let us do this painful thing while the fit is on us.”

    He took the money and gave it to another clerk.

    He made me write the sum on a slip and sign my name in
    a book. I no longer knew what I was doing. The bank swam before my eyes.

    “Is it deposited?” I asked in a hollow, vibrating voice.

    “It is,” said the accountant.

    “Then I want to draw a cheque.”

    My idea was to draw out six dollars of it for present
    use. Someone gave me a chequebook through a wicket and
    someone else began telling me how to write it out. The
    people in the bank had the impression that I was an
    invalid millionaire. I wrote something on the cheque and thrust it in at the clerk. He looked at it.

    “What! are you drawing it all out again?” he asked in
    surprise. Then I realized that I had written fifty-six
    instead of six. I was too far gone to reason now. I had a feeling that it was impossible to explain the thing. All the clerks had stopped writing to look at me.

    Reckless with misery, I made a plunge.

    “Yes, the whole thing.”

    “You withdraw your money from the bank?”

    “Every cent of it.”

    “Are you not going to deposit any more?” said the clerk, astonished.


    An idiot hope struck me that they might think something had insulted me while I was writing the cheque and that I had changed my mind. I made a wretched attempt to look like a man with a fearfully quick temper.

    The clerk prepared to pay the money.

    “How will you have it?” he said.


    “How will you have it?”

    “Oh”–I caught his meaning and answered without even
    trying to think–”in fifties.”

    He gave me a fifty-dollar bill.

    “And the six?” he asked dryly.

    “In sixes,” I said.

    He gave it me and I rushed out.

    As the big door swung behind me I caught the echo of a
    roar of laughter that went up to the ceiling of the bank.
    Since then I bank no more. I keep my money in cash in my trousers pocket and my savings in silver dollars in a sock. -


  23. Deco

    Interesting analysis of the Euro by the German Economist Stefan Homburg. He also has a very interesting analysis of the “short-sell” game going on in the bond market for the PIGS state bonds.

    Basically, they drive the bonds down, then they buy the bonds, and then the EU bails them out, and drives up the price of bonds – and makes the high yields safe.


    • CitizenWhy

      That’s the short game. Drive down, buy, drive up, sell. And they are glad to have governments help them play this game.

      Or am I wrong about the markets being a rigged game, and everything is really run by a Benign Deity called the Invisible Hand (replacing the Trinity?) that assures a fair and free market?.

      • Deco

        The whole thing is based on deceit. By deceit, war shall be waged, according to Sun Tzu, and sure enough it is war. The problem is that we have people in control who are worse than Neville Chamberlain. Chamberlain was buying time in 1938 – because the Spitfire had to be finished, the Hurricane still was not perfect, and the radar stations were not right either. And the Royal Navy was in poor shape.

        The likes of Gordon Brown (“not only have I saved the world”), Cowen “we have turned a corner”), the Neo-con gang, and the new Neo-con gang, plus Barrosso and his mates in Brussels (each boasting where they were in 1967.).

        Never mind appeasement – appeasment was a strategy. Copping out is not a strategy.

        The West is not lead by thinking coy Neville Chamberlain types – it is lead by Marshal Petain types whose response to everything is how brave they were decades earlier.

        • Praetorian

          Petain of Vichy infamy?

          De Gaulle might be more appropriate, he argued for the use of the tank in mass formations, but wasn’t listened to by Generals with a firmly WWI mindset. He fought bravely against the Nazis and then carried on in London in less than ideal circumstances (uneasy relationship with Churchill).

          He tried to bring some sense to his Generals on the war in Algeria which nearly got him assassintated and he also warned Kennedy against getting stuck in Vietnam (advice the Americans ignored). He brought some honour back to the French but blotted his copybook in 1968 by being out of touch but then the trick to a truly great leader is to know when to go.

          • CitizenWhy

            DeGaulle also wanted to end colonialism after the war, so Churchill smeared him to Roosevelt, and he was laughed at as somewhat loony. DeGaulle also wanted to arrange for the West to get its oil from Russia. He feared what would happen by getting entangled with Saudi Arabia.

          • Deco

            You are correct – De Gaulle actually was a very honourable sort. I remember there was a documentary and they interviewed an elderly French man in his dungarees at his workshop about De Gaulle. The elderly man started talking about De Gaulle, and he was full of praise for the man, and how he was a decent human being. Then he started to talk about what had happened in French politics afterwards, and he started to cry. He was overcome at how a collection of shysters took over France in his absence (Chirac being in the President at the time the documentary was completed – and Chirac was before courts many times).

        • Re “The problem is that we have people in control who are worse than Neville Chamberlain. Chamberlain was buying time in 1938 — because the Spitfire had to be finished, the Hurricane still was not perfect, and the radar stations were not right either. And the Royal Navy was in poor shape.”

          The Brits to buy time took Sun Tzu’s advice to heart and assembled a brilliant counter intelligence agency with the UK’s most brilliant minds eg Alan Turing in Bletchley Park who eventually broke the enigma code


          Compared to our gombeen ostriche , anti intellectual, anti academic demonisation of critical indignant citizens!

          The only plan they have is to follow the dictats of ECB/IMF designed to cripple Greece, Ireland et al, to gain time for German/French banks to recapitalise themselves with profit to the point they can withstand a future inevitable default.

          Meanwhile Greece, Ireland get economically nuked and devastated while the ‘insider’ countries of Germany, France get by unscathed.

          In WW11 the enemy could be seen. When you denigrate and isolate intellectual and media discourse around these matters, blindfold the general public with propaganda they should pay for the bills of zombie banks and Grendel NAMA, you not only can’t see the enemy, you are a Quissling collaborator and tool of those calling the economic destruction of this island.

          Kicking the can into the future preserves the economies of the insider Deutsche bank economies of the EMU at the expense of the peripherals.

          It also preserves the insider elites in the peripheral countries with further funding for nefarious ways that got us into the mess.

          We should be as sceptical as indignant citizens in Greece who see bailouts bailing out those who got us into the mess with austerity aimed at burning those who didn’t!

          • Malcolm McClure

            Kicking the can into the future buys time for the Smart Alecs in the hedge funds and investment banks to rearrange the chips on the roulette table so that the portfolios of widows and orphans bear most of the losses and the elite gets off lightly.

      • Deco

        Well, the market is basically a collection of individual agents.

        A rigged game is reliant on centralized control of information, and widespread assumption that there is no control of information.

        Like the Irish housing market in the binge era. Everybody assumed that the market was working efficiently as a market. Actually, mal-information was widely distributed, and factual informationw as witheld. When this happens and there are euphoric conditions who get massive imbalances.

        It all goes down to information flow.

        “Please support our advertising sponsors”.

        We have the weapon to put an end to. We are using it now to communicate with each other – the internet.

        • wills


          *Susceptibility to persuasion* works well too in brainwashing people into buying into a debt based existence.

  24. CitizenWhy

    Ireland’s Dear Friend Obama uses trade agreements to boost corporate control, kill manufacturing jobs and impose bank deregulation. Deregulation as worked wonders for the US economy, has it not? Or perhaps Obama wants to cause a bubble and crash in other countries to restore US dominance? Or did he just buy up a load of Irish Fairy Dust and wants to spread its happy effects (at least for the rich) throughout the world?


    • Deco

      bank deregulation is a stimulus package for the FIRE economic model. Everybody can get rich buying an selling property to each other for a few years. The debts mount up.

      Eventually the end point is the same as with all stimulus packages. The money has to be paid back. Except those who got “stimulated” in their bank accounts have sent the money to the Caymans. Tax that, if you can. 7 Billion Euro on deposit in the Isle of Man, Anglo branch.

      In the end they will resort to print-baby-priny to restart the FIRE econmy. They are obsessed with the FIRE economy.

  25. gizzy

    Irish people do not march because people have always needed a banner to rally under. The Greek trade unions are rallying the people over there. Ours have being discredited as being part of Bertie’s social partnership cock up. So to follow Dr Story’s advice and take to the streets we need someone respected and well known to unfurl a banner. I for one will do somethng I have never done and march.

    • You can do your own personal protest:

      Take your money out of the Banks and crash their raping ponzi scheme!!!

      • gizzy

        Have taken it all out over three years to support ailing businesses and pay staff wages. Need a non financial protest. Am thinking of emigrating for the second time in my life. Listening to Healy Rae on the radio this morning was the last straw. It was a strange but recurring feeling sitting in the car by myself and being embarrassed again by being Irish.

  26. CitizenWhy

    Ireland’s future? The inefficient, slipshod privatization of public service in Indiana, USA sends a chilling message about the future as pushed by zealous conservatives.


    • Praetorian

      Check out Puerto Rico, fascinating programme by Al Jazeera yet again (ARE YOU WATCHING RTE-PRAVDA?)

      Puerto Rico: The financial experiment

      • Government serving the interests of big money against the interests of the people, same here in I(OU)reland

        Huge cuts to public sector spending, raising of charges.

        Raising of charges for water, education, health, energy are especially interesting as they amount to a hidden tax against the poor.

        Given the poor are less able than the rich to pay there is compelling evidence that such charges should more equitably be absorbed into taxation across the board, if not singly on the richer in society.

        We’re following after Puerto Rico.

  27. Where are they?

    Where is the legal profession in Europe? Why is there not a single case brought forwards to:


    the European Court of Justice against J.C.Trichet?

    it might just happen one of these days.

  28. Excellent analysis by those LA Times staffers.

    “John Donahue, who studies public sector reform at Harvard University’s Kennedy School of Government, said even the appearance of too-cozy contracting ties can taint a well-intentioned privatization effort.

    “Contractual hygiene is pretty important,” said Donahue, formerly an assistant secretary of Labor in the Clinton administration. “People tend to be paranoid about conflicts of interest, and for good reason.”

    There is a move towards privatisation of healthcare in Ireland with all the dangers implicit in the article.

    If initial privatisation costs can be tendered below cost, they can easily be made to escalate or lead to deterioration in service once grabbed by the private sector. Much better is professional management of public services to keep costs down and quality high.

    Behind all of this is the Green Eyed monster of the ECB/IMF, the banks, the private sector who see the public sector as a honeypot to be milked for profit and perhaps eventually to be sucked dry of resources that are targeted by the vampires for profit.

    • Deco

      very cosy links between the PDs and the HSE.

      Also the Beef Baron is heavily involved in the nursing home sector – where there are massive tax incentives. I know a retired butcher, and a former worker in a Beef Baron plant – and both have a very low opinion of him.

      The type of businessman that you would expect to be hanging around CJH. If I said anymore I would get David McW in trouble.

      • http://www.irishtimes.com/newspaper/frontpage/2011/0609/1224298641803.html

        “Dr Shaun O’Keeffe, former chairman of the Irish Society of Physicians in Geriatric Medicine, said the case highlighted how important it was to have a robust nursing home inspection regime in place and how important it was to have a body like the Health Information and Quality Authority to which people could go if they had concerns.”

        Those in support of private health care and a lowering of public involvement will latch on to ‘Health Information and Quality Authority’ to cover up falling standards, not their opposite.

  29. Adelaide

    I have always enjoy the comments here but I am getting tired of commentators bashing capitalism without offering an alterantive system. I just find it lazy.

    This year I decided to educate myself about economics
    “23 Things They Don’t Tell You About Capitalism”
    “86 Biggest Lies On Wall Street”
    “Capitalism: A Graphic Guide”
    “Stunted Lives, Stagnant Economies”
    “Thailand: Bust and Boom”

    I have yet to read (anywhere) a genuine viable alternative economic system to capitalism. The alternatives that I have familiarised with have an equal measure of pros and cons. I am coming to the conclusion that capitalism is the best of bad bunch.

    If anyone could point me in the direction of a genuine viable alternative I would appreciate it as I find the subject quite interesting.

    • You are not Cogito Ergo In Carcero quite yet then?

      Perhaps a six month stint in any city jail and a study of the down and outs might help:)

      • Adelaide

        Another lazy comment. Can you propose a better alternative economic system? Enlighten me with your unique knowledge and not just a grudge, a chip-ob-your-shoulder rant.

        • Oh all right, you don’t need to go to jail, it might be too much of an exertion for you.

          Try dressing up as a tramp and living as one for a few months. This bloke did it here and it helped change his perspective.

          Suggest you take along some of his books as well:)



          • I should point out I’m a capitalist democrat who favours capitalism over ‘socialism for then banks’:)

            No need for insults, you are looking to inform yourself, its to be lauded. Apologies for the wry comment about going to jail. Books are only one source of information was my intended point.

    • CitizenWhy

      There are many capitalisms. All require a free and fair market as an engine of investment in business and job growth. Some require a free and fair market with a government safety net or well managed social benefit system and well regulated industries (Social Democracy). Another form of capitalism being pushed by the right wing in the US favors absolutely no government involvement in how commerce operates other than the enforcement of private contracts. In effect, a return to the 1700s-1800s and the absolute rights of big property, the same system that brought miserable factory conditions, the wrong response to the Irish potato failure, and the prison gulags of Australia. Also in effect you have rule by corporations, which some call crony capitalism, state capitalism, or aristo-capitalism.

      The problem with Financial Capitalism as it now operates is that investment money (capital) is now being diverted from investment for business growth and poured mainly into financial instruments, many of which are simply gambling bets placed in the hands of traders who know how to operate a rigged market system. In addition, many of the big financial companies operate with a government guarantee: as a business you keep all profits, you pay big salaries and bonuses, but when you suffer loses the taxpayer will take responsibility for them while you continue to operate as usual and pay yourselves big salaries and bonuses. The common phrase used is “too big to fail” which is really a way of saying that these companies cannot possibly survive in a fair and free market system that penalizes mismanagement.

      An alternative: the old US method of regulating financial companies worked well without turning to Social Democracy (except for some features such as Social Security). Social Democracy also worked before governments took on the main mission of protecting banks from their own foolish decisions and mismanagement. For instance Sweden, a conservative Social Democracy, let their banks fail and did just fine by having the government take them over and straighten them out before returning them to the private sector. By conservative I mean adhering to the discipline of a market system while providing a good social benefit system. The problem is that few other countries, when overly influenced by bankers and billionaires, allow for the market discipline that is essential to capitalism.

      In many countries governments, influenced by lobbying and money, now subsidize destructive industries and protect them from market discipline while letting other industries deteriorate.

      Given the rightward drift of the US, and the oligarchy of banking and certain corporate interests holding power here (not all corporations are bad, just businesslike), some states are imitating South Dakota and creating “partner banks” to ensure the proper protection of savings and the proper investment of capital in business growth.

      some answers. … 1. A return to Social Democracy combined with a commitment to market discipline, especially in the financial sectors. … 2. In the US a return to the old regulatory system that kept companies honest and subject to market discipline. A movement forward to Social democracy would be nice that this is the USA, where the right wing is powerful and very shrewd at creating a populism that aims its hate the poor and immigrants rather than at corporate bandits.

      Many of the complaints are indeed ambiguous. Do people want a return to an honest market system rather than the corruption we now have (this would include conservative Social Democracy) or do people want Socialism, whatever that would mean?

      The thoughts are done on the fly, but I hope they are helpful in some way.

      • wills

        Excellent synopsis CitizenWhy.

      • Deco

        The ultimate form of regulation – no bailout when a finance house goes bankrupt. That tends to sharpen minds a lot, and eliminate a lot of liberal lending practices.

        Another stern form of regulation – a civil suit by shareholders against the directors of reckless operations. We did not see any against the directors of Anglo, INBS, AIB/BoI, etc… Instead all we get is non-stop advertising telling us that they have money to lend, when they have nothing to lend.

    • Juanjo R

      Noam Chomsky has written a bit about about anarcho-syndicalism.

      I think the idea was hip in the 1920/30s and would have gone have hand in hand with modernist ideals doing the intellectual rounds at the time.

      From Wikipedia;

      “Chomsky is a self-described Anarcho-Syndicalist, a position which he sees as the appropriate application of classical liberalist political theory to contemporary industrial society:
      ( Chomsky quote ) “Now a federated, decentralized system of free associations, incorporating economic as well as other social institutions, would be what I refer to as anarcho-syndicalism; and it seems to me that this is the appropriate form of social organization for an advanced technological society in which human beings do not have to be forced into the position of tools, of cogs in the machine. There is no longer any social necessity for human beings to be treated as mechanical elements in the productive process; that can be overcome and we must overcome it to be a society of freedom and free association, in which the creative urge that I consider intrinsic to human nature will in fact be able to realize itself in whatever way it will.”

      ^ The Chomsky-Foucault Debate on Human Nature, The New Press, 2006, p.38-9. Theres a book too “Anarcho-syndicalism: Theory and Practice” by a guy called Rocker – Chomsky wrote an intro for a new edition of it.

      • CitizenWhy

        My Jewish Arabic first cousin by marriage in Paris was an editor of The Encyclopedia of Anarchy (Anarcho-Syndicalism, also called Autogestion in France). He was also a prison official.

        Some random thoughts on Anarch-Syndicalism:

        I did a paper in university on Proudhon, who introduced the concept and term autogestion. Autogestion has also been the official, propagandistic intellectual foundation of Khaddaffi’s Libya. Of course it was not practiced.

        The Spanish Civil War is often misinterpreted as a conflict between a Socialist/Communist and secular Republic versus a reactionary Nationalism determined to create a Fascist Catholic society and state (Mussolini style, not Hitler style). But the most important aspect of Spanish society at the time was the success of the unions in Catalonia at implementing the practice of Anarcho-Syndicalism. The Syndicalists did not like the Socialists and rightly distrusted the Communists. Among other dishonorable acts of the Communists, as the Republic collapsed the Communist shipped off the huge Spanish gold reserves to Moscow.

        In the USA the Wobblies (IWW) were anarcho-syndicalists and opposed to the socialists and communists. I lived for 6 months with a Wobbly remnant family that made its money in farming and rodeo riding. The Wobblies were regularly attacked and brutalized by small town establishments. Joe Hill of song fame was a Wobbly. Sacco and Venzetti weere also Anarcho-Sydicalists.

        In the USA the owner of Boston-based Filene’s department store, a great patron of the arts, was also an Anarcho-Syndicalist. He tried to get his workers to take over management and ownership of his store but they wanted none of it.

        In the movie Munich the family and its patriarch who agree to help the covert Israeli Mossad agent track down the Arabic attackers of the Israeli athletes in Munich came from the Catholic Anarcho-Syndicalist movement whose members generally run small businesses. This fact, and why the patriarch articulated such an anti-government position, was lost on every American I know who saw the film. Unfortunately the anarcho-syndicalist movement in France was very often tainted with an extreme anti-Semitism. So I was glad to see this group agreeing to help a Jew provided he was acting on his own to avenge his slain fellow Jews rather than acting as an agent of the Israeli state. Spookily, when hitching across the USA before the Munich attack, I met the mother of one of the slain Israeli athletes.

        I think there is room within a Social Democratic state for businesses run as worker owned cooperatives. We even have some in the USA.

    • Juanjo R

      I think for me its not such a black and white debate in so much its about capitalism versus communism. It is this viruent strain of neo-liberalism that is hi-jacking capitalism as a whole that is very much the problem. A capitalist system with checks and balances, wealth redistribution and social equity is fine but that is very much being lost here over the last 15 years. The future doesn’t look bright for a lot of us I think as a consequence.

      Here’s a succint American overview on where they have gone over the last 30 years in 2 minutes;

      My favoured reading list would be the following;

      No Logo & The Shock Doctrine – Naomi Klein
      Globalisation and its Discontents – Joseph Stiglitz
      The Return of Depression Economics – Paul Krugman ( for some contrast with the prior above Krugman being more right-wing – its very interesting what he brushes over )
      Maxed Out – James Scurlock
      Mastering Economics – Jack Harvey ( general textbook)
      Economics – The Economist ( again for contrast )

      Golem xiv’s blog (aka Dave Malone) is excellent I can’t recommend it enough. I’m trying to get my hands his book on ‘The Debt Generation’ but I find I’m having to order it in – I expect it to be very good. I’d like to read some more of Terrence McDonagh of NUIG’s views too about Irelands situation he strikes me as a straight talker. He has alaigned himself a bit with the new ULA (PBP + SWP + other socialists).

      If I was to say one book from the above is essential reading it would be ‘The Shock Doctrine’ by a clear head and shoulders. It is riveting and very well backed up and far more readable than the likes of Chomsky.

      McWilliams’ books are alright – certainly they can be eye opening at times. He repeats himself a bit though particularly in his other writing and is prone to sloppy inaccuracies and simplification/ exagaration to back up his ( fundamentally sound ) points – in my opinion. He reminds me of a thinner ginger less jokey Michael Moore. He is nearly a national treasure. Less T.V ad appearences and more diligence required I think.

    • Praetorian

      @ Adelaide

      I suggest you cast your net a little wider. You may wish to start with one book. David Harvey’s Enigma of Capital and the crises of capitalism. There are also many documentaries on this topic and plenty of online commentary (see youtube, Znet, Counterpunch, main Chomsky website and many more). Thankfully there are many honest and decent people writing and commentating, who don’t live in fear and have the imagination to think beyond the ludicrous prevailing consensus.

      There is a wealth of material out there in relation to an alternative to the current neoliberal socio-economic system. If you have been following posts on this site for over a year or more you would have seen some very basic changes which have been suggested. It is pure propaganda when people say there is no alternative.

      One thing is certain, if we do not change course we will destroy ourselves as a race.

    • A hair thin vote allowing more austerity and more debts to be dumped on Greek citizens reminds me how it was in Ireland, where Lowry and Healy Rae were bought to provide a ‘majority’.

      Undoubtedly, the junta of Banksters and Politicos are providing the package to be forced through.

    • Deco

      This might have finished the careers of many (useless) Greek politicians, but it will put Sarkozy back in business.

      Every FIRE sector lender to the PIGS in The State of the Franks contribute to the Re-elect Sarko campaign. The French media will find that it is in everybody’s commercial interest to say good things and preserve Sarko. Sarko – the comeback kid. And there will be no compromise on the interest rate for us, because he will feel emboldened.

  30. Adelaide

    Open Challenge to our regular commentators.

    “Capitalism Vs A Better Alternative Economic System – Historical or Theoretical.”

    Would the regular commentators put forward their individual proposal in the next blog under the above heading?

    This should make for interesting and informative reading. I for one would be particularly interested in hearing my favourite commentators and would love to read their informed viewpoints that are not singularly focussed on this present crisis.

    Would the regular commentators contribute?

    • Adelaide, I think you assume incorrectly that many on this forum are not in favour of Capitalism; see my own comment above, also that of CitizenWhy judging by his comment. I’m concerned that socialism for the banks and the concerns for big business are replacing democratic rights of people; Governments used to be for defending the rights of citizens and improving their welfare? Perhaps the questions you should be asking are;

      Who Is Stealing All Our Money?

      What Are The Challenges Facing Traditional Capitalism And Constitutional Democracy?

      Who Stole The Public Purse And Spent It On Banks Rather Than On Hospitals, Schools, Public Libraries, Parks, Creation of Employment, Economic Development, etc ?

    • wills


      Capitalism in the world today is a system with its genesis in the setting up of the bank of England back in the day in 1694.

      Since that *big bang* moment the owners of the means of production spread their private banking model system far and wide.

      Overtime the reliance on financial instruments became the engine of growth.

      And here we are now at a point where this 300 year old financial instrument pOnzi scam is so eroded and so hollowed out and so used up it is fighting for its life.

    • FAiken


      There is no better alternative to capitalism. What’s going on in Ireland is Capitalism versus a corruption of capitalism.

      “the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble. Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease. The government must never try to prop up wage rates or prices of producers’ goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries.”

      Rothbard on Mises


      • Praetorian

        Capitalism is legalised corruption. What happened was the bending of the rules of the game by some, causing trouble for the many. Politicians paid to act as guardians of the Republic were too busy making money on the side or micro-managing constituencies, they certainly were not keeping a close eye on a sector the consequences of which has seen the country cede its sovereignty to an international organisation with an extremely poor track record. Just watch Greece if you have any doubts or see Ireland in 14 months for crisis.

      • Juanjo R

        “Corporation n: an indigenious device for obtaining individual profit without individual responsbility.”

        (Ambrose Bierce)

  31. Deco

    The Greek Deal.
    Austerity. (More taxes to stiffle activity, and feed the undeclared economy).
    Privatization. (Great deal for the insiders – foreigners will only invest if they have Ahern figures to smooth everything over in the internal cliques).
    Brussels controlling the state budgetting process.
    Greek bonds are secured for the holders for an interim period.
    The market can increase confidence.
    Reduced questioning over what is really happening in the Spanish economy with 21% unemployment, but no housing related bad debt.
    G.Sucks not made liable for anything.

    Welcome to the EU. George Orwell warned of this.

    • Praetorian

      According to the Guardian, the package amounts to a hard-hitting package of tax rises, cuts to benefits and public spending, and privatisations.

      Tax increases include

      - A solidarity levy: At 1% for those earning between €12,000 (£10,800) and €20,000 a year, 2% for incomes between €20,000 and €50,000, 3% for those on €50,000 to €100,000, and 4% for those earning €100,000 or more. Lawmakers and public office holders will pay a 5% rate.

      - A lower tax-free threshold: People will now pay tax on income over €8,000 a year, down from €12,000. This basic rate of tax will be set at 10%, with exemptions for those under 30, over 65, and the disabled.

      - Sales tax: The VAT rate for restaurants and bars is being hiked from 13% to the new top rate of 23%. This rate already covers many products in the shops, including clothing, alcohol, electronics goods and some professional services.

      Spending cuts include:

      - Public sector wages: Salaries will be reduced by 15%.

      - The public sector wage bill: The goal is to cut 150,000 public sector jobs, through a hiring freeze and abolition of all temporary contracts. This should cut the total bill by €2bn by 2015.

      - Social benefits and pensions: The retirement age is being raised to 65. Increased means testing, and cuts to some benefits, will reduce the total amount spend on benefits by €1.09bn in 2011, then €1.28bn in 2012, €1.03bn in 2013, €1.01bn in 2014 and €700m in 2015.

    • CitizenWhy

      The smart money in the USA is saying: Default of Greek Bonds inevitable, but not yet. Yet Europe dodges this reality. The “not yet” is very costly to European societies.


    • CitizenWhy

      Nice succinct article on Greece – the creditors, not the Greeks, are being bailed out. The comment from Mike from Nola adds an important point, paralleling a point made here by Praetorian.


  32. Fellows,
    it takes me at least ten attempts to log in here now to actually get logged in…odd indeed.

    David is there something a miss with your authentication server?

    Greece will default that’s for sure so why are the IMF and ECB so keen on them to take a second bailout?

    I see it as pillage before the rape.

    These bankers are criminals!!!! Let’s not beat around the bush just because they wear fancy suits and try and bambuzal us with high brow BS….economics is simple don’t be fooled.

    As Max Keiser says capital punishment for crimes against capital.

    Take your money out of the banks ASAP, it’s the only way to sink them and save ourselves.

    The less money they have on deposit the more they need to back fill to keep their fractional reserve system going…remember they need 10% on deposit to loan out anything :-)

    Debt begets debt :-)

  33. Flynner

    Huge credit to Mr Mc Williams for using Mobile Operators commercial
    info to depict the strength of the economy. Mobile spend per person is
    a direct correlation of economic wealth and GDP Per Capita.

    Although there are some errors with this post.
    The value of an operator is defined by EBITDA (Earnings Before
    Interest Tax Depreciation and Amortization)
    multiplied by the going rate of the market at the time (example times
    7, or times 8).

    The key point here is that if Vodafone are experiencing a 10% decrease
    in EBITDA and they forecast that this will continue into the future
    then the decrease in value (to account for Impairment Losses) would be
    a value which is multiplied by the going market rate (times 7 or times
    8). Which is fine to use that as a barometer for the economy but not
    when you try to divide it by the population. It’s not a tangible
    figure. Especially if you consider that he divided it by population
    and not by subscriber base.

    Vodafone Greece has 6.5million subs (users) – population of Greece 11million
    Mobile subscribers in Greece as a percentage of population gives you
    “mobile penetration” – 100% penetration means same amount of phone as
    2009 figures -Greece mobile penetration 180%
    So that means that there is an estimate 20 million phones in Greece.
    Vodafone have <30% of the market. So by dividing 30% of the market
    into 100% of the population, you are distorting the figures.

    Summary points: I disagree with his misuse of Impairment Losses as
    some of the value could be representative of market valuations,
    depreciation of the infrastructure and network etc. and I oppose his
    misuse of basic division to generate a forecast for the success rate
    of the bail outs.

    • Juanjo R

      This came up already look up the blog I’ll repeat it for you;

      According to Wikipedia ( I know its wikipedia so touch wood ) Vodafone has 2.3 million subscribers in Ireland, 4.2 in Greece, 15.8 in Spain, 5.1 in Portugal and 22.8 in Italy — market share percentage appears to be a significantly higher here than elsewhere.

      So thumbnail calculations would put Vodafones Ireland’s debt impairment at 400(ish) euros per subscriber.
      Greece is at 200 (ish)
      Spain is at 200(ish)
      Portugal is at a mere 70(ish)
      Italy is at a very mere 40(ish)

      We are still way out in the lead!

  34. finners_99

    I think that you need to consider the ARPU per country not just the absolute level of impairment by national population. Look at the impairment as a % or the ARPU and things will change a little.

  35. ladygee2

    Ever since Lendahand and BIFFO guaranteed the banks back in September 2008 this country has been simply ‘going down the tubes’. The banks should have been left ‘go to the wall’ and new banks set up, but that didn’t happen!!! The wrong people have been running this country since the foundation of the state. Anyone with a grain of common sense would have been able to run this country properly if they were given a chance, but they haven’t been allowed to run the country the way that it should have been from the very beginning because of the ‘vested interests’ sticking their oars in. If we were really interested in changing things for the better we should be out on the streets like the Greeks and giving out stink!!! But what do we do instead, we slope off to the nearest pub and have a ‘few pints’ and talk about what needs to be done instead of we going out and actually doing what needs to be done!!! It’s no one the country is in the ‘state its in today!!!’

  36. Halberstram

    This is not, in fact, supported by the disclosures in Vodafone plc’s annual accounts.

    The reason for the increased impairment charge was , as you alluded to in your piece, an increase in the discount rate applied to the expected cashflow for the Irish CGU. Under vodafone’s accounting policy (and in compliance with IFRS), the discount rate chosen for each of its regions is the yield on 10yr bonds for that country.

    You state that Vodafone has downgraded its growth forecasts for Ireland booked a higher impairment charge on its Irish operations as a result.

    However, at least on my reading, the annual reports for 2010 / 2011 actually suggest that vodafone has upwardly revised its projections. I refer you to the assumptions tables in the accounts :

    2011 2010
    Discount Rate 14.50% 9.80%
    Long term growth rate 2% 1%
    Budgeted EBITDA 2.40% 0.80%
    Budgeted CAPEX 9.4%-11.6 7.4 -9.6

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