May 14, 2012

Deadly mix of market forces

Posted in Markets · 145 comments ·

When I was a boy, there was a very popular game played by all the kids on our road. It was called “clackers”. It involved two plastic balls on two strings tied together at the top. The balls hit off each other with force making a “clack” noise. Once one ball hit the other, the other would whip back and hit the other and so on, back and forth. This could go on indefinitely if you didn’t touch them.

It was only years later that a science teacher explained to me what was driving the clackers. It was apparently something called Newton’s Cradle. It explains how momentum and energy can be transmitted.

Newton’s Cradle is a construction of five steel balls. You might see it on executives’ desks from time to time. The balls are suspended from a beam and they just touch each other – barely “kissing” each other, as snooker players would say.

If you draw back the outer ball and hit the other four, the last ball will move on its own and then swing back and hit the four stationary balls with almost the same force. The energy will pass through the balls and the last one will swing out, taking the energy from the others and the outside ball swing back and forth and so, on and on.

This Newtonian Cradle is a nice way of looking at the financial markets right now. The global financial markets are being hit by two opposing forces, and it is leading to strange, unstable outcomes that might explain why JP Morgan lost €2 billion on bad trades over the past six weeks.

This is a phenomenal amount of money to lose, and the very erratic nature of the losses and the way the markets are moving right now might help us to figure out what is going to happen next in European politics – and why there is little point trying to make the irrational rational by voting on anything in the next few weeks.

The two forces hitting the financial markets – and thus the European economy – are totally opposed.

The first is the long-term force of deleveraging and deflation. These are the results of the unwinding of the huge borrowing we saw in the past ten years. As people save and pay back their debt and as companies do the same, the natural tendency for financial markets is to consolidate, because the outlook for growth is poor. But these forces are now bumping into recurring, dramatic and quite erratic rounds of bailouts, liquidity injections and special lending funds like the ESM and the EFSF.

All the interventions drive the markets in the opposite direction to the direction that deleveraging and deflation tends to drive them.

Now, how do these two countervailing pressures affect financial markets and risk?

They make things very unpredictable. That is because the clash of the forces injects far too much risk, and things don’t return to normal.

All of us like things to return to normal after a shock. We can deal with a world where the risk of things being out of our control is modest.

Let’s take a real world example of human nature and explain how people – even people with different attitudes to risk – like things to return to normal.

Imagine two people make a doctors appointment for three o’clock. Mr “Risk Averse” might be the type of person who turns up at quarter to three; just to be sure, he is there on time.
Now, consider Mr “Risk Taker”. He might be the sort of person who has had to wait in a doctor’s surgery for a little while because the last patient is taking more time than expected. So he might just arrive at three on the dot. Therefore, of the two types of people, one arrives at 2.45 pm, the other at 3pm.

That is the risk they are taking. One person takes no risk by assuming that, if the doctor is early, he’ll be there. The other takes the risk that, if the doctor is there a bit early, the doctor will see the next person in the queue and he will lose his place, but he will be next in the queue so he will have to wait only a little while. One takes no risk, the other takes some.

But the key thing is that both are fairly sure that they will see the doctor in or around three. They are fairly sure that this is normality, and they adjust their behaviour accordingly.
Now consider what would happen if the doctor said that the appointment would not be at three, but would be sometime between 8am and 8pm, but they’d just have to show up and see. Now everyone is confused and freaked out because normality has been messed with.

Something similar is happening with European financial markets because these two forces – deflation versus intervention – are keeping everything from settling down into a predictable path.
So the risks are much bigger. Take the example of Spanish bonds; the natural tendency is for Spain to default because it has too much debt and not enough growth, so the market goes one way. Then the ECB comes in and injects huge amounts of liquidity into Spain and the bonds rally. The market gets caught and allegedly very clever people get caught on the wrong side of the market and get squashed, like the people at JP Morgan.

Now, I have no problem with that because they are in the game, and if they can’t figure out where the risk is, that’s their problem. But the policy implications are very clear. The first is that these jokers should be severed from the very core of banking. The JP Morgan statement explaining what happened last week referred to “excess deposits” being used by the traders who lost €2 billion. This should never be allowed to happen.
Depositors’ money should never be gambled in such a way, particularly because of the volatility described above.

The other point is that, with these two massive forces at play (deleveraging on the one hand and massive intervention on the other), the signals coming from the markets are not really telling us anything about the underlying strength or weakness of an economy.

Therefore, when Germany responds to a bond crisis on the periphery by trying to force through a ‘fiscal compact’ that has nothing to do with what is going on in Italy, Spain or Ireland and everything to do with the basic of physics of the Newtonian Cradle, it is being disingenuous.

In fact, when the global markets are exhibiting such volatility, you would be mad to hold a referendum on fiscal policy, the results of which will ultimately be judged by the same erratic markets.

Not only would you be mad, you’d be clackers.

  1. Adam Byrne


  2. molly

    This is very interesting and if you stand back from this and think about what we are being asked to vote on at the end of this month,it seams bonkers what’s the rush wheres the fire will someone die if we put this off till later in the year.
    I just can’t get my head around why this is being rush ,do something in a rush and repent at your leisure .
    Making jobs in the export sector is of no use to the domestic economy all this government wants to do is protect there own pay and the state pay packets and export everything out of this country,a civil servant said on the radio this morning I am voting yes because Europe pays my wages and that says it all I am ok jack fuck everybody else.
    How can the majority sit back and take all the shit that’s being thrown at us vote yes and we will be locked it to a deal that we will have to get blood out of a stone.
    If things keep going we will be standing in out side the soup kitchen or starve.

    • @ Molly
      ‘do in a rush and repent at your leisure’

      Can I give you what I learned when in a camel traffic jam in a desert : ‘ There is no such thing as urgent business only people in a hurry’.

      Camel Drivers are notoriously dangerously cruel.We must not allow ourselves to become Camels in a Desert.

    • Mark Walsh

      Molly, that Civil Servant position pretty much sums up matters.

      All civil and public service employees (circa 400,000) will be advised to vote ‘yes’ to secure their current salaries and accrued pensionable years of service, not to mention salary & position hikes that are purely based on time served and not on ability, work or effectiveness.

      As for the 450,000 unemployed, they will be told a ‘no’ vote means imminent benefit reductions/cancellations as there will be no access to funds to continue payments.

      This leaves the remaining 400,000 Private Sector citizens paying the wages of the Civil & Public Servants together with those that are unemployed.

      Don’t get me wrong, I’m not slagging off the unemployed. In fact I believe every civil & public servant (save for nurses and possibly Garda) should be made to re-apply for their jobs and compete with unemployed, former private sector, applicants.

      This,in my opinion, would put the cat among the cushy pigeons and finally turn the tables in favour of pro-active, willing workers as opposed to the unionised ‘not-in-my-job-description’ Rolls Royce pension scheme, civil service layabouts.

      To Recap: Circa 400,000 (civil & public servants)
      Circa 450,000 (unemployed)
      Total Gov.
      Wage Bill
      Per Month: Circa 850,000

      Funded By: Circa 400,000 (private sector)

      One-Third paying for Two-Thirds: Madness, do the Math, this can not be sustained.

      • Adam Byrne

        Banana Republic. Not fit to govern ourselves. It’s embarrassing.

      • molly

        Yes I agree all the state employees are on the yes vote ,crow park and all that,most of the rest of us have taken a battering in terms of wages and the high cost of trying to live in this banana republic.the government are state employed and are going to try to protect what they have and if it means more cuts to thoes who are out side this circle they will try to do this .i can only speak for myself I say I have had enough and as you rightly say the sums don’t add up and the sums will never add up.
        The only light I can see is to export myself out of this banana republic,because with the voters we have voting for who we have we deserve what we get.
        Only way I can see complete change is a complete new government with none of the FF, FG,LAB

      • sean ban

        Your list doesnt include the pesion for public servants which averages around €30,000 per annum,paid for by the private sector.

        • Mark Walsh

          True Sean, and all paid from the current account.

          My numbers were only highlighting the available workforce, 1,200,000, and the inverted income payment structure we have in place.

          An ever decreasing private sector getting crushed by the ever increasing public wage/unemployment/pensions bills.

          It’s disgusting, the elitist Irish that caused the fuck-up, come on the state sponsored airwaves and say ‘ah sure, we are where we are.’

          Fuck that, IMHO. Imprison these pricks.

          But no, we won’t.

          We’ll talk about the weather, the GAA, the EURO Championships etc.

          Bertie & Co walk around the place with impunity.

          I (47yrs old) am leaving this godforsaken corrupt country by years end and will have zero-to-negative interest in its welfare ever again.

          In some respects I hope it goes down.

          Maybe then the elected officials and bankers will be bitch-slapped by every citizen in public, a kind of public stockade if you will, and a New Ireland, a Direct Democracy Ireland, will rise from the ashes.

          Until then, DMcW’s tagline ‘Don’t Look Back In Anger’… of luck with that project.

          • Mark,

            Best of luck on the next steps.


          • Mark Walsh

            Thank you David.
            You keep up your stellar work.
            God knows we need more of you chipping away to the rotten core.

          • Adam Byrne

            I’ll be going myself Mark as soon as I’m finished studying.

            The muppets in this country keep on voting for the same old chancers like lambs to the slaughter.

            There’s a better future for hardworking people OUTSIDE this country.

            I’ve been horrified by what I’ve seen in two years back – things you wouldn’t get away with in any other nation on Earth.

            Good luck on your big move, Adam.

          • molly

            I got hammerd on my pension while the people I payed my taxes to support get there pension protected I won’t get caught again .

          • Mark Walsh


            Thank you for your kind wishes.

            Was away for 13 years myself and cannot for the life of me understand why our people love playing the game of Russian roulette. Putting their trust in parties that only care about themselves. It beggars belief.


            Apologies for my earlier use of expletives. I’m very angry (no need for Sherlock on that front)and want to see those responsible pay for what they did and indeed didn’t do.

            Also, in no way was I having a go at you re: Don’t Look Back In Anger.

            Unfortunately I will. Thus, my reference.



      • wildata

        Of the 400,000 private sector, how many are effective tax payers, at last count I think only 20% paid more than 5-6K P.A.

        Numbers are meaningless here, 5% may pay 80% of the taxes, sadly, though perhaps not unrelated, 3-5% seem to have 90% of the country ?

        Think on these lines it would appear we hope about 30,000 taxpayer will clear 160 Billion of Debt.

        David, time to publish a simple ONLINE Ireland Inc “HouseHold Budget”, time we all got real information on the scale and insolubility of this countrys problem in very plain English. Or is this too sensitive to publish ???????

        • Mark Walsh


          I concur. The 400,000 private sector tax take is insufficient to cover civil/public sector & unemployment payroll and pensions every month.

          Clearly the old model did not envisage 450,000 extra ‘unemployed employees’ on the Government payroll.

          If we know that the tax-take from the 400,000 cannot come anywhere close to paying for the 850,000 Government dependants, where do their weekly/monthly pay-checks come from?

          The only logical answer is through Government borrowing. So now we are at the farcical, ‘death-roll, pay-roll’ situation where our Government borrows to pay for current salaries and pensions.

          If I am the provider of said funds (loans), I not only own the Government and its employees, I own the country. For if my demands (sale of state assets) are not met I simply cut off the pay-check tap. The Government and their employees will bend-over as much as I want to keep the boat afloat.

          People blame ‘Merkozy’, EU etc. but that is just taking aim and managing to hit the dartboard.

          The bullseye is the money-lenders.

          Only when we return to the creation of our own debt-free money, with a non-Rothschild Irish Central Bank, will we be able to forever reverse the Irish death-roll, pay-roll dilemma.

      • Good post Mark

        I previously worked in the public sector but most of my working life was spent in private industry. I have been unemployed and know what it’s like living on my wits. That’s life and I would not have it any other way mind you. I got used to it. I feel alive these days even though I am poor. I can’t spend a tenner without thinkng of the weekly budget. That’s how tight it is but I grew up that way and can handle it. No problem

        When people get sucked into the public service they lose their sharpness and become complacent and selfish. They don’t realise that the price their power and rewards extracts from others to keep up the pretence and inequality. They are happy to be yes men and watch others being pulverised. I can’t sit back and watch that happen. I say we waken these people up, say no and make them realise that the world does not owe them a living and that the world stretches farther from the end of their noses

        Personally I’d like to take a battering ram to it and this is why I am saying no way Hose to the pampered elites who are all aboard the gravy train and content with the status quo. It’s purely policial now and the unions are strangely quiet. They are bought and paid for and not fit for their purpose. And there are 450,000 hungry faces left looking through the glass

        • Mark Walsh


          Thank you. I too would love take a battering ram to the civil service structures. As you rightly point out they are not fit for purpose. They operate in a 19th Century fashion and should all be forced to re-apply for their jobs.

          Today I read that Oliver Wyman (track record not so hot), the consulting firm to PTSB, have put in place a re-apply policy for every employee.

          As I mentioned their track record is not so hot, but at least they are attacking the cause of incompetence and not merely applying a bandage to the broken bone.

          Similarly, we need a root-out and branch-out approach to the people that run & ruin OUR counties, OUR cities and OUR country.

          Regrettably these folks believe it is THEIR county, THEIR city and THEIR country.

          Our system of governance and control of our own money supply requires a volte-face from its current trajectory.

          We need Direct Democracy (see Switzerland) to root out the incompetence; from the office clerk to the county/city CEO, from the city/county councillors to the TD’s.

          If they are not doing their job to the satisfaction of the people, they can be removed before their term is up.
          Any nefarious piece of legislation that they try to ram through parliament/council can be blocked by the people and their elected heads will subsequently roll.

          We need control of our own money supply, yesterday.

          We cannot continue with the Rothschild involvement in our Central Bank.

          Without Direct Democracy and control of our money supply our destiny is domination.


          • Hi Mark,
            can you tell me about this Rothchild involvement in our central bank please….I’m intrigued to know the connection.



          • Mark Walsh

            Hi Josey,

            Not sure if you’re winding me up or not, but let’s presume you’re not.

            The Secret Of Oz, , is an award winning documentary tracing the history of money to present day.

            Watch the 1hr 56min documentary.

            If you are not convinced of Rothschild involvement in every Central Bank in the world and that the Irish Central Bank is not in the pocket of the Rothschild’s, then we can agree to differ.

            (there were only 5 truly state owned CB’s remaining in the world, namely North Korea, Cuba, Iran, Iraq and Libya……oops Iraq & Libya gone, now 3 and soon to be 2)

            Interestingly enough when our CB is asked for its full list of shareholders, the response is always opaque and deflects the question to the functions of the Irish CB.

            It should be as simple as ABC to unequivocally state that the Irish Government is the one and only shareholder of the Irish CB.
            But they don’t and they can’t because there are more shareholders than just the good old Irish Government.

            Anyway, the Rothschild’s took control/ownership of the Bank of England shortly after the Battle of Waterloo, created The Federal Reserve in Jan 1914, the Central Bank of Iraq (adiós Saddam) and of late the Bank of Benghazi, Libya (adiós Gaddafi).

            The Irish establishment will poo-poo such talk as conspiratorial etc. and mock those that question.

            Why not call or write the Irish Central Bank?

            Ask specifically for (in writing) the complete list of shareholders; then read what you receive in the post.


          • bonbon

            There seems to be a speaking difficulty who runs banking. The Privvy Council has existed since at least Elizabeth I, and various names go back quite a while as Shakespeare well knew. But the British Empire in 1763 became the global banking elite – Venetian families had a lot to do with this. Now look at the bank membership of the Inter-Alpha Group, euphemistically downplayed, and look at its founder. Especially the timing – right when Nixon broke the Bretton Woods. Modern derivatives began then.

            As regards Switzerland- one look a UBS and one wonders how “direct democracy” is supposed to function.

            We are dealing with a British monetarism that is totally bankrupt, and will exterminate us unless split up, ala Glass-Steagall.

          • Mark Walsh


            I’m with you on Inter-Alpha. Are you suggesting that I-A saw the closing of the gold window as their carpe diem? If so, it’s perfectly logical from where I view matters.

            In relation to DD versus what we have, no system is perfect. However, I would rather have an ongoing say as opposed to once every five years.

            I agree with you on the Imperial front. It’s clear the Anglo-US alliance, ‘special relationship’, is a lot more than just buddies having a few ice cold Buds.

            My anger is directed towards our internal elites who crave to be within that circle and will sell our people through debt and our natural resources for a few cents, in order to gain admittance.

            They care not for anyone, or anything, in this country but themselves. Disgusting human beings.

            At least DD can break the political cartel of FF,FG & Lab.

          • Hi Mark,
            I wrote to the central bank yesterday, curious to know the rothschild connections, and asked for their shareholder list, this is their reply:

            Dear Mr Josey,

            I refer to your below enquiry and thank you for contacting the Central Bank of Ireland.

            The Minister for Finance is the sole shareholder of the Central Bank, in accordance with the Central Bank Act 1942. In accordance with our European obligations (under the Treaty on the Functioning of the European Union and the Statute of the European System of Central Banks), the Central Bank is functionally independent of government.

            In accordance with the Central Bank Act 1942 (as amended by the Central Bank Reform Act 2010), the Central Bank submits a performance statement annually to the Minister for Finance which is then laid before the Houses of the Oireachtas. The Governor and the Deputy Governors may be required to appear before committees of the Houses of the Oireachtas to address certain matters, including the Bank’s annual regulatory performance statement.

            Additional information on the role and structure of the Central Bank is available on our website. The ECB site also has useful information on the Eurosystem.

            I hope this information is of assistance to you.

            Yours sincerely,

            XXXX XXXX

            So it seems the Minister of finance is the sole shareholder.

            I’ve heard all the rumours before of the “Rothschild” connections but cannot find any evidence just hearsay.

            Though I’m still looking…

          • Shhh. We are not allowed to mention the Rothschilds

      • Grey Fox

        You would still end up with 450,000 unemployed
        and you should not paint all Civil Servants with the same brush!

        • Mark Walsh

          Grey Fox,

          First and foremost my response is not directed at or towards you per se.

          That said…..

          Under a re-apply for your job policy we would end up with more than 450,000 unemployed.

          The Civil & Public Service employment levels would be shrunk to 21st century efficiency levels.

          No more jobs and Rolls Royce pension schemes for old rope paid by the private sector and Government borrowings.

          Whether we like it or not humans are innovating themselves out of jobs every year. Unemployment levels will never return to the 5% levels enjoyed in Ireland during the Tiger years.
          Ever increasing unemployment levels are here to stay. There will be temporary decreases in the numbers unemployed from year to year, but the decade-on-decade numbers will inevitably increase.

          As for painting with one brush, you make a good point.

          I will reverse my position on that when the public and civil servants agree to rip up the Croke Park Agreement and acknowledge that it is an agreement that comes straight from George Orwell’s Animal Farm, where ‘all animals are equal but some animals are more equal than others’.

          The only gig in town is public or civil service employment.

          What about the recent civil and public service retirees (in receipt of their pensions) being rehired (double income) as contractors when we have qualified people out the wazoo lined up in dole queues? Please don’t say said retirees are the only ones able for the job.

          My recently unemployed friend had to endure the drivel of a public servant bemoaning the fact that he now has to pay towards his pension and had to eat a 7% pay-cut.
          Not one to back off, my good friend told the public servant to STFU as he has to eat a 100% pay-cut and his pension scheme fund has been wiped out, whose wife is unable to work,a mortgage, car payment and two kids.

          Oh, and are people aware that the Gardai are entitled to €50 per week for ‘rent allowance’ whether or not they rent or have a mortgage? I wish the private sector bosses would extend such an allowance.

          So, rip up Croke Park and come into the real work world and do not hide behind the Government’s guaranteed ATM.

          If the ‘Croke Parkers’ win the day and maintain the pig-like status in Farm Ireland I’d rather they take a big cold shot of STFU and accept the justified criticism.

          RIP Croke Park.

          • molly

            Yes how right you are ,but will things ever change,I think the government will try to get us into further hock to keep the gravey train rolling along .i feel so down about what’s unfolding in plain sight,does this government think we are such fools the lucky ones have left ,my message to the ones that have left this banana republic ,don’t be home sick be glad you have made the switch be happy not home sick.
            My message to this government is you are a sick bunch of wasters bring back the guillotine of with there heads.

          • Grey Fox

            Mark, I will not argue one single point you have made, I will make the point that there will be collateral damage with your proposal, the lower grade civil servants who work their ass’s off, and they do, I know this! they do not have one single allowance! None and the vast majority are very very thankful to have a job, and don’t forget these are the people who took the jobs when nobody else would, when the private sector laughed at the prospect of taking a job for 350 euro’s a week in the civil service. It is very difficult to see someone else with a job if you have none, I have been there too, but turning on the civil service enmasse is not the answer, this is exactly what the Government want, keep the serf’s arguing among themselves and we can get on with the rip off at hand, I would welcome with open arms a policy where and grade from Executive Officer (EO) up was required to apply for their jobs again and I would welcome a tearing up of the Croke Park agreement in conjunction with that. The croke park agreement will fail in any event but when it does, it will not affect the middle and upper grades of the civil service! it will immediately attack the lower grades and the upper grades will beat their chests at what a good job they are doing reducing cost while dancing on the heads of Clerical Officers and frontline staff, make no mistake about it!

  3. Beaver

    I´m assuming your a NO voter so :-). Question. While watching vincent Brown the other night the no defenders were repeating that the approval of the treaty would mean 6 billion a year out of the Irish economy. The Yes men said thats rubbish but didnt give their own figures because I suspect its worse than 6 billion a year. If the state debt has to go from 160 % of GDP in 2014 to 60% of GDP in 20 years I calculate GDP = 150 billion. 60% = 90 billion, 160% = 240 billion. Getting from 240 billion to 90 billion over 20 years means 7.5 billion a year for twenty years. And this ignores the hacking needed to get the structural deficit, whatever it is down to 0,5 % double quick. Are we doomed or what if this treaty is approved and implemented. ? Answers on this blog please.

    • Jimmy R

      Yep, Pretty much sums it up. after the bailout ends in a few years, we’ll have 20 more years of massive cuts if this treaty passes. The yes side would probably challenge the 160% figure, but even if its 100% debt to gdp, that’s about €3bn a year in cuts for 20 years (assuming no growth). The reason we can assume no growth is because almost every other nation in the eurozone will be forced to do the same austerity as most of them are well over the 60% figure theselves.

      I can see 1 of 2 things happening if this treaty passes as is, 1 a lot more likely than the other. 1, (and unlikely) There’ll be nobody left in europe in 20 years to pay the taxes and debts. They’ll have all emigrated to other countries.

      The other thing is massive social unrest, which will break up the euro (not sure about the eurozone, i still think that might survive) and lead to large scale defaults. Once that happens, all the european banks will crash because they are ridiculously undercapitalised (despite what any politician says) and we’ll have to start all over again from scratch.

      • mrlennyman

        Well said Jimmy…are you the one and only Jimmy Rimmer or am I mistaling you for someone else?

        • Jimmy R

          the united footballer? :P

          i’d say you have me mistaken, just a student sitting studying for exams watching the world fall down around me.

  4. StephenKenny

    There’s something that’s probably worth adding to this question. We’re staring a game of the “Prisoner’s Dilema”, but on a global scale, with the wellbeing of about a billion people in the balance.

    If we all start acting purely out of self interest, then the carefully orchestrated currency/interest rate balancing act that the world’s central banks have been playing will collapse, which will lead to a depression that would make the 1930s look like a slightly tiresome recession, but we, as a result of acting first, we will be relatively better off than if we didn’t . If we don’t focus on ourselves, but someone else focuses on themselves first, then we’re in an even worse position. Hard to win.

    Time is running out, and the economies are not really improving at all – even the news out of the US is mainly illusory. It seems to me that the US elections are a key date, as possibly is the forthcoming attack on Iran.

    • Philip

      Spot on. chain reaction of Newton’s cradle is kicking off and we should not be one of the balls in the line. We need to break away asap and the clowns will say…stop being so negative, it’s not as bad as you’re painting, the growth figures are looking good (soon) and …

      Analogies are going to be running fast and thick soon. But as a final one…EU is like bright eyes – seconds away from the inevitable splat cos it cannt make a decision.

      Ireland might be the safest place in Europe yet.

  5. chrisi313

    Didn’t we have a 30% deficit in 2009 to bail out Anglo, an all time record for any country I’m aware of, ever? If that was so “important”, what if we need to do it again? Shouldn’t the government be lobbying for a no vote?

    And what about NAMA and similar SPV off balance sheet spending? Does this count as deficit for the purposes of the treaty (the capital given to NAMA was counted as an investment, although obviously its going to be nearly all lost).

    I’m genuinely mystified by the weird perversions of logic and accounting this government foists upon us to try to cover up its own cronyism and incompetence.

    I think any moderate realist can see that the real reason for this referendum is to use as a bludgeon against us when we complain. Expect to hear “Sure didn’t yis (we) vote for austerity?” within a month. Its a blank cheque for destruction.

  6. Philip

    Cannot help feeling the N.Cradle analogy is not the most appropriate. It feels like a resonant frequency has been found to rock the entire EU to its foundations. The energy to keep this swaying flying more and more back and forth is the generation of funny money aided and abetted by commission seeking financiers who need to increase the amplitutde of the swing so money can be made on the rebounds. It is that simple. The system is about to fail soon for 2 reasons

    1) The financial swingers and in-country ruling elite are keeping eachother in a job so will keep it swinging more and more.
    2) Economic motion sickness is causing people to toss in the towel and walk away. These are the real doers and leaders who drove wealth creation. This are the cracks and structural failures that are happing everywhere and it starts at the tertiary level of industry…retailers/ coffee shops and will rapidly head for the core…Germany.

  7. Adelaide

    There is no point going back to having our own currency if we continue with the same model of credit creation as debt-bearing-interest-issued-by-private-banks-on-fractional-reserve-basis-for-profit.

    We’re simply raising the Titanic for a repeat sinking.

    Not that we’ll hear any proposals for superior alternative economic models on mainstream media from the feathered gombeen axis of powers that run/ruin this country.

    I’m hopeful that the fabric of fear that binds our society together will be replaced by an intelligent momentum to a new economic model driven by the regrettable but inevitable poverty of the majority of our citizens out of sheer frustation with the gombeenism that maintains the status quo of vested interests.

    “I’m mad as hell (and destitute!) and I’m not taking it anymore!”

    This time in history presents us with a rare opportunity to break with the broken past when the present facade collapses. We either choose the well-trodden path to dystopia or seize a brave chance at utopia, and the first steps to utopia starts when people wake up and stop delegating their lives to third parties, otherwise we are just wasting each other’s time and systemically wasting and destroying peole’s lives with indifference and ignorance and the quick-fix-buck and bullshit distractions.

    Historic times ahead.

    • bonbon

      Hayek’s Utopia, that of the Austrian School variety, was to massively depopulated (re-start small you see). The elites plan to allow resistance for the 1 billion survivors, if Obama is allowed to start thermonuclear war. All the clamor about “fractional reserve” means a gold-standard for a fraction of the population.

      Let’s fractionate the banks with Glass-Steagall instead. Slice and separate “investment” banking from serious commercial credit system banking.

      JPMorgan is again the center of chaos (its London arm) exactly as in 1932. Well FDR handled that then.

      • Deco

        JPM lost a few billion. JPM are a master of the universe when it comes to the Derivatives business. You may as well have Paddy Power in charge. Because it is all a series of bets. Without the eijjets in the local bookies with a scrap of paper in one hand, and a pint in the other.

        Could not happen to a more deserving bunch. How much did they get bailied out, via TARP ?

        Warren Buffet (who is effectively a shareholder in some large US Banks) called Derivatives, Weapons of Financial Mass Destruction.

        • Tony Brogan

          JPM received a reported 25 Billion bailout.
          It is perhaps so leveraged on the dirivitive market that it is reportedly liable for 57 trillion or so.
          It holds approx 80% of the silver shorts while at the same time being the trustee for the largest silver fund SLV. Supposedly working to maximize the returns on the fund while working against it by bare naked shorts. The silver fund could be invested in silver proxies and not bullion thereby reducing demand for silver bullion and keeping the price lower.
          A real vipers nest. It could be that a loss of 1% of their capital could make JPM insolvent. (Just my guess). More news is expected from JPM over the next few days.

          Jim sinclair reports that the world is broke and will print QE to infinity. The world’s debts cannot be repaid even if 100% of the world output were to be seized for the next 100 years.

          solid assets are the only individual recourse to the coming debt tsunami and financial crash.


        • bonbon

          JPMorgan Chase Situation Gets More Interesting

          May 14, 2012 (LPAC) — As calls on Congress for Glass Steagall restoration get louder, the possibility is emerging that the Act may be immediately needed (among other far more important objectives) to save the commercial bank of JPMorgan Chase.

          All reports now are that the bank was unquestionably using its huge inflow of commercial bank deposits to build up its immense derivatives position (nominal value at least $70 trillion), including becoming the “whale” within the global credit default swaps market. Having bet wrong and lost, JPM Chase now faces the task of getting out of its positions in a market which is basically illiquid, where what liquidity there was was largely being provided by – JPM Chase. It can be forced to exit in a long and painful process with many, many billions in losses.

          And the money it is losing, came from the flow of its depositors’ FDIC-insured, Federally protected commercial-bank accounts.

          Today we learn that the quickly “resigned” chief risk officer of the whole bank, Ina Drew, is being immediately replaced by JPM Chase executive Matt Zames. Zames just happens to be the head of the financial sector-wide Treasury Borrowing Advisory Committee, which meets at least quarterly by statute with the U.S. Treasury to consult (and act) on financial conditions. In effect, the risk-run-wild at JPM Chase is now put under protection of a close Geithner/Bernanke collaborator. In September 2008, Jamie Dimon dispatched Zames to Bear Stearns to put that bank under, which Zames did by immediately calling the Fed and insisting that Bear Stearns “would not last another day,” leading to the Fed giving Bear Stearns to JPM Chase virtually for nothing with a $30 billion infusion from the Fed buying Bear’s bad assets.

          More ironically, Zames “came up” in speculative finance as an executive of LTCM, so he is expert in dealing (unsuccessfully) with exactly the situation JPM Chase has now speculated itself into.

        • Deco

          The stuff they want us to beleive.

          Advertising is propaganda in consumerist societies.

    • Tony Brogan

      “There is no point going back to having our own currency if we continue with the same model of credit creation as debt-bearing-interest-issued-by-private-banks-on-fractional-reserve-basis-for-profit.”

      Absolutely correct Adelaide,
      You may be interested to read of ways to change the monetary system and introduce sound, commodity money that has no counter party rick and is not issued as a debt instrument like hte current fiat money.

  8. molly

    We need to vote yes in this banana republic how else is this past and current government going to keep the gravey train running.i wish I was on the gravey train with these liers ,then I could get me redundo early my fat pension my hand shake and then get my old job back or if I was a government minister I could go and tour the other banana republics and get big wad for telling them how to keep there gravey trains running.
    I thought this was a nightmare I was having untill I woke up and stuck a pin in my head and realise its the way we the tax payer let out country be run.
    We let these sharks tell us what to do.

  9. bonbon

    Mighty stuff DMcW – I’ll quote your above paragraph :

    “…Now, I have no problem with that because they are in the game, and if they can’t figure out where the risk is, that’s their problem. But the policy implications are very clear. The first is that these jokers should be severed from the very core of banking. The JP Morgan statement explaining what happened last week referred to “excess deposits” being used by the traders who lost €2 billion. This should never be allowed to happen.
    Depositors’ money should never be gambled in such a way, particularly because of the volatility described above. ”

    That’s EXACTLY Glass-Steagall. There are calls, I posted in previous thread, for banning US institutions from trading in London described as the nearest to the NWO you can get. JPMorgan was the main culprit Pecora went after leading up to the FDR banking legislation in 1933. It is AGAIN a serial perpetrator (like DSK)!

    Sickeningly this “London Whale” blowout has more impact than the sadistic destruction of Greece.

    As @Philip above mentions “Economic motion sickness” – it is nauseating.

  10. molly

    The alcoholic government will do anything to get a drink all sence of reason goes out the window and it’s like watching a puppet show and we fools for letting ourselves be walk on .
    God help us we will need it because we have have to endure another couple of years of this government .

    David do you think the voters will have seen the light befor its to late .

  11. Harper66

    This a video worth watching Enda Kenny addressed by a member of the public.

    Things are begining to reach tipping point.

  12. wills

    I just do not believe JP Morgan on this 2 billion loss.

    It stinks.

    They are involved in the cover up of a quadrillion CDS pyramid scam in shadow banking system and they are all hands up on 2 billion.


    Don’t buy it.


    Criminal gangster bankers who’ve rigged the system are controlling policy making and are addicted to money.

    • Jimmy R

      it was supposed to be losses from hedging. The thing is, if it was actually hedging, the losses would be offest by gains on other investments and they would either break even or make a profit in the end. it’s blatant proprietry trading with customers money on volatile products. it’s reasons like this that glass-steagall was made in the first place all those years ago.

    • Tony Brogan

      Hi Wills
      Jim Willie of the Hatrick Newsletter, The Golden Jackass has a radio interview here that totally backs your assertions and then some. It is well worth the 45 mins to listen to.
      Best regards

    • Tony Brogan

      Sorry left the link off
      Here it is


    • redriversix

      Can I just point out that we here in F.E.M.A think that Jamie Diamond is a great guy and think he has a really nice house…………

  13. Deco

    What if things are about to deteriorate to the point that the markets don’t care about the referendum outcome ?

    It would come as a massive blow to both sides, with all their nonsense.

    Really, if you were not preparing for this from 1999 onwards, you are in trouble now. In massive trouble. It takes that long to get it correct. And even then, you need to spend your time working on being ahead of the game now.

    And how do you prepare ? By ignoring the mainstream opinion that is fed into the populace, by ignoring “the manufacturing of consent”. Because when you are having your consent manufactured you are like a sheep being driven into the shed, ready to have the wool take off your back (if you are lucky, even).

    You really have to do your own thinking. And if you are “enjoying yerself” with a few cans, and a match on da telly, and voting for Da Bert or Willie O’Dea, then the chances are that you are one of the suckers in this country who gets abused everytime.

    I have been hearing stories about NAMA – and it is a case of the professional class, and men in suits getting ready to rape the common people again.

    Be your own intellectual leadership. Turn off the mainstream media, because it is not interested in telling you the truth, when it is being paid so well to tell you something else, which will redistribute the proceeds of your toil to others who know that the game is rigged – because they have it rigged.

    Be your own intellectual leadership. And keep your money in your pocket. Be your own department of social welfare, because the real one is running out of real money. Be your own department of health, because the real one is run by people who happen to be pals of the clowns who used to rule the country two years ago, and who wrecked it’s finances.

  14. bonbon

    There is more :

    May 13 (LPAC)–JPMorgan Chase Chairman and CEO Jamie Dimon appeared on NBC’s “Meet the Press” Sunday morning and tried to chill out the crisis triggered by his bank’s suddenly announced major derivatives-market losses: “It’s not life-threatening,” Dimon lied, and forecast his bank would still show a profit this quarter. Humorously, Dimon insisted on the one hand that he knows with absolute certainty that the huge London CDS trades were just hedging risk, not casino bets for the bank; on the other hand, he said he didn’t know about the size or nature of these trades until this week!

    Clinton Labor Secretary Robert Reich’s blog entry was again on Glass-Steagall on Sunday, and he warned the truth will out: “Word on the Street is that J.P. Morgan’s exposure is so large, that it can’t dump these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street.” Reich concluded: “What just happened at J.P. Morgan reveals how fragile and opaque the banking system continues to be, why Glass-Steagall must be resurrected, and why the Dallas Fed’s recent recommendation that Wall Street’s giant banks be broken up, should be heeded.”

    An article in the Sunday London Guardian noted: “There is thought to be more than one high-profile trade behind the losses — which the bank has admitted could escalate. JP Morgan is being selective about the information being disclosed because its rivals might [!] try to move prices against it as it attempts to unwind the trades.” Some sources estimate JPM’s losses can go to $20 billion; the “wrong bets” were over $100 billion. Recall that LTCM’s collapse, in precisely such a derivatives predicament, unfolded over a full three months at the end of 1998, until the verge of a global financial blowout was reached.

    New York Times financial reporter Gretchen Morgensen endorsed Glass-Steagall in a Sunday column on JPMorgan and Dimon’s hubris: “This much is clear: If the Glass Steagall law were still around, the problematic trading at JPMorgan would not have occurred.” This was after reviewing former FDIC Deputy Commissioner Michael Greenburger’s arguments, circulated Saturday afternoon, a complicated scenario that the Volcker Rule plus the Lincoln Rule would have ameliorated the loss.

    On NBC “Meet the Press,” Sen. Carl Levin appeared opposite Dimon, strenuously arguing for the Volcker Rule and Levin-Merkeley: “So we’ve got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole” that includes the trading involved in the JPMorgan loss. The “loophole” is the Obama Administration’s anti-Glass-Steagall Dodd-Frank Act itself. Even one of the “Austrians” at the website commented, “The most important thing not said [on "Meet the Press"], was Glass Steagall, the one law whose overturning allowed the commingling of deposits and hedge fund activity courtesy of Gramm-Leach-Bliley, hilariously called the Financial Services Modernization Act of 1999. If America is to have even a remote hope of returning to normalcy, Glass-Steagall has to be reinstated.

    • Deco

      Lehmans 2.0 ?

    • StephenKenny

      I think that I’m correct in saying that Glass-Steagall would have had no affect here, as the JP Morgan trading took place in London.

      Gramm-Leach-Bliley was essentially a law that enabled Wall Street to ‘catch up’ with the regulatory freedoms enjoyed in London.

      Putting Glass-Steagall back would just move Wall Street to London, keeping the liabilities with the so-called host nations of the banks concerned, in the case of JP Morgan, the liability lies with the US taxpayer (Too Big To Fail, etc), while the benefits go to the Wall Street/London.

      There are now German politicians suggesting that German Banks should be banned from locating in London.

      • bonbon

        Glass-Steagall must be across the board – even UK voices call for this (ring-fencing being ineffective).

        It is becoming visible to even the most stubborn that this financial system is London centered. Also there is the epicenter.

        So much for London not being in the Euro…

        • StephenKenny

          It seems unlikely. The effect on the UK economy and property market would be indescribable.

          • bonbon

            Glass-Steagall and probability – what statistical measure could bring this?

            This is an act of will, maybe desperation by those who sat on unlikely financial carry-on for too long. Even some of the Austrian School have started to see the point. (posted at previous thread a long list item of unlikely utterances from unspeakable luminaries).

  15. Deco

    By the way, Paddy Power is the largest “Financial” stock on the ISEQ now. A bookmaker from Kildare. The hilarity of it is just enormous. The only gambling operation that is still in business.

    BoI are listed in the top 10, but lets be honest here – really the PAYE taxpayer deserves that spot for putting them there.

    FBD Insurance are somewhere down the list – proving that Irish people can manage their financial affairs. But hold on. FBD “missed” out on the property boom. How come the management did not get sacked for not getting on baord in the property boom. Holy Fingers, Batman. Why did they not feel some envy as the other financials got their directors in prime positions in the K-Club, and bought rounds afterwards in the clubhouse for the regulator, and government ministers.

    Sometimes the smartest thing to do when the world around you goes mad, is to allow it all to pass you by.

    Keep Calm.

    Carry On.

  16. Deco

    This is a very heavy blow.

    Normally Moodys see trouble when it is in yesterdays newspaper, blowing around on the pavement, getting forgotten about.

    And now Moodys are talking about Italian banks.

    That French Triple A rating might be in trouble.

  17. I think it’s important to note that we’re not as dependent on the value of assets as we might think.

    The most important parameter of the economy is the money supply. Currently we owe more to banks than exists and we have to pay debts to banks in euros, not assets. The value of our assets can fluctuate without affecting the money supply.If anyone’s bank balance lowers from the sale of shares, someone else’s goes up by the same amount and overall the money supply remains unchanged.

    It’s a point I brought up with Karl Whelan at our meeting on Friday, although he disagreed that modern economies operates from a position of insolvency.

    Paul Ferguson
    Sensible Money

    • wills

      ‘The most important parameter of the economy is the money supply.’


      No it is not.

      Human beings are.

      • I hear you Wills and sorry for being so inconsiderate.
        Of course humans are, but to keep us trading well together we need an adequate money supply, not an increase in GDP.

        At the moment an increase in the money supply can only occur when someone acquires a bank loan since money comes from bank loans in the modern economy. This is what I’m trying to highlight and change such that could better serve…humans.

        • wills

          Okedoks Paul!!

        • bonbon

          That’s why human beings organize themselves into nation states , set up national credit and Hamiltonian Banking. To counter the British monetarist system which after all is based on Mandeville.

          And instead of clamoring for morality in a Mandeville Grumbling Hive (the inspiration for the current system), apply Glass-Steagall firmly and accros the board as FDR did using the nation state.

          • Tony Brogan

            Any amount of money is enough to allow a thriving economy.
            Problems arrive when the the money supply is changed. The assumption that a growing economy needs a growing money supply is incorrect.
            In fact adding to the money supply creates distortions in the economy so the economy becomes less efficient. this is because the wrong signals are sent into the economy .
            now we have a nominal increase in the GNP reflecting the increased money supply and a faultering economy at the same time.
            These distortions are not removed just because the money supply stops increasing and so soon it is noticed that the economy is slowing.
            The antidote is thought to br more money so again money supply is increased, GDP appears to rise but economic out put stalls some more. More money is added etc. etc.
            Eventually we arrive at today where no matter how much money is thrown at the economy it still is headed for the toilet.
            That is why gold and silver work so well as it is virtually impossible to increase the money supply.
            now a major cause of economic distortions not to mention inflation is removed from the economy.
            The money system must be rejigged to sound money principles ar there is no hope of any thing but a massive monetary and financial collapse.
            Individuals can do the next best thing and abandon fiat paper script and buy silver and gold while it is still available. Paper money goes to zero value in all cases so the inverse of that for the price of gold and silver is Infinity. That is as high as anything can go. The latest example was the zimbabwe dollar. a gold ounce was worth many trillions of Z dollars.
            money does not or should not belong to the state as it is private property. A truly free man desires a frree man’s money. gold and silver.
            most of the western world is enslaved by the debt based fiat money system. Blame your central bank, blame your government aquiescence, blame yourself and your ap[athy for allowing it to happen. The solution lies within each person.

          • Tony Brogan

            Hi Bonbon
            You keep on recommending Hamiltonian banking. just what do you mean by that?
            My reading suggests it is modelled after the Bank of England which is the mother of all central banks as you know.
            Are you suggesting that we use a central bank. If not what? Are you suggesting that the bank issue credit? Is it a debt, a loan, does it charge interest. Is it a pure paper script or backed by something of substance? What is the collateral for the credit?
            I would really appreciate a full explanation of what you mean by Hamiltonian Banking. Please explain.


          • bonbon

            From sensible money, be it tokens or metal, will simply ooze and seep public prosperity ? This is the core Austrian (Ron Paul) thesis. And it is the LTCM/Black-Sholes highly mathematical theory of wealth diffusion giving us the present catastrophe.

            Hamiltonian Banking goes after this British monetarist formulation. National Credit systems were developed to deal with the above.

  18. jonathan

    Thanks David,

    I like the idea of Newton’s Cradle but even that is not in a vacuum, it eventually stops!

    Found this great explanation of the Debt Crisis and how the slowing down (I MEAN ABRUPT STOP) of the Financial Markets!

  19. Very good writing

    We are all at the mercy of forces known and unknown

  20. gizzy

    Can anyone explain why the government which has shown no appetite for change, decision making or leadership is so gung ho for this referendum? Would have thought even to protect their own selfish skins they would have held off.

    • redriversix

      They all receive voucher,s for lidl and a big screen T.V if it passes,Gizzy…………..I am not sure if anyone can answer that question as they are so mind-numbingly stupid,it beggar,s belief apart from the fact if we vote No we will be eating cabbage soup for the next 400 hundred years……..Good Morning

  21. coldblow

    Great article David. It’s the closest I’ve seen to describing what’s going on. This makes sense of what’s happening, plus Stephen’s idea of the currencies being marshalled to stay in line with each other.

    Reminds me of the Simpsons where Moe is stressed out tring to run a family friendly diner. “Look at the veins on that man’s head”, says Krusty. “He’s gonna blow!”

    Clackers. Autumn 1970? or was it autumn 71? Nah, pretty sure it was the first.

  22. Adam Byrne

    Ireland has been reduced to beggar-like status by the shameless corruption and criminality of the political and financial elites.

    Meanwhile, Enda Kenny and his incompetent cronies are on the ‘news’ telling bare-faced lies EVERY NIGHT OF THE WEEK and barely anyone bats an eyelid.

  23. piombo

    Forgive me for being simplistic here, but what I see from DMcW’s article is the quantity theory of money being applied in an effort to stabilise prices. This widely-accepted theory (even taught to CA’s like myself) espouses that prices move according to the supply of money, ie., more money higher prices and vice versa.
    Essentially, money supply should maintain prices in equilibrium over the medium term (anything over 12 months).
    Therefore, as DMcW’s article sets out, deleveraging reduces the supply of money (using the M2 parameter) thus causing deflation while intervention (releveraging) increases the money supply thus causing inflation.
    Assuming the above, I assume David you are alluding to either runaway deflation or inflation over the medium term. I can only see a real risk of deflation over the medium term, I see no medium term inflation risk whatsoever.
    While I “get” David’s analysis as to the effects, I would ask myself what is the deep-rooted cause of such an imbalance within the EZ monetary area and the only explanation I can see is that a choice has been made by the ECB (including the Irish and Italian members) that the solvency of governments and the liquidity of “core” country banking systems outweigh the need to reflate the periphery countries asset bases. Thus we have deleveraging in Ireland and releveraging in Germany, France, Italy and Spain. Now, the banks who have been releveraged, where are they going to invest this liquidity? Irish real estate, don’t think so.
    They will invest in their own nations’ Government bonds because of political pressure to fund deficit spending and because they earn circa 500bps margin for the effort and in commodities because they are liquid investments. Irish deflation simply does not weigh upon the ECB as the “core” is being munitioned to face a certain Irish EZ withdrawal.
    If, however the ECB had played it straight according to monetary theory, they would have employed a much longer LTRO timescale of at least 7/10/15 years and would have lent to each country’s central bank for deficit spending and to domestic banks for reflation of each affected economy.
    Unfortunately, our government and central bank chose not to put up the good fight.
    Vae victis as the Romans (ancient) would have said…

  24. Alan42

    What happens if Greece is kicked out of the Euro and goes through a messy default and much pain and then starts to recover much faster than the rest of the PIGS ?

    Would the Euro crisis just rumble on for years as countries toy with the idea of leaving looking at Greece as an example and the markets unsure of who is staying and who is going ?

  25. Harper66

    , May 15th, without comment anywhere except on sites such as this, Anglo paid an unsecured bond of £60,000,000 – that’s sixty millon pounds sterling, around €73m. On May 28th, AIB (another debt-ridden bank we now own) will pay a bond of €2.25bn.

    • Thanks Harper

      Searched google news ‘Anglo Irish Bank’ for last 24 hours and nothing. Feck all

      That is another ‘Mainstream Miss’

      • Harper66

        Hi Pauldiv,
        yes with out folks like Diarmuid, David et al we would be completely in the dark. Here is the Ballyhea blog. Complete with the account of the TD bemoaning how difficult it is to get by on 140 grand a year!

        I have not watched or read mainstream Irish news media in a long time.

        • coldblow

          I saw an account in the Daily Mail, which based (I think) a leader comment on it. I thoroughly dislike FG but this made me feel some sympathy for the TD. First, I think it was supposed to be a private conversation. Secondly, accusing her of ‘xenophobia’ for joking that Gurdgiev should go back to Moscow speaks for itself.

    • grougho

      kudos to diarmuid and the ballyhea gang. why the silence from the mainstream media, and our host???

  26. Adam Byrne

    Food crisis in West Africa now. I don’t even need to know the tragic details but I know this: I bet it could all be traced back to some immoral people’s activities on futures and derivative markets that should be closed down tomorrow if not yesterday. The world is shagged.

    • StephenKenny

      When you’ve broken all your mortgage backed securities toys, you have to move on.

      • bonbon

        Which is why financial agencies like biofuels. Farmers play along, and customers literally burn food production potential, all the while raising the prices of staples.

  27. redriversix

    Funny how I have not seen anything in Mainstream about Merkel,s election defeat on Sunday in Westphalia,Germany’s most populous region ,13 million people.She got her big ass handed to her on a bigger plate……

    • bonbon

      Well its all over the press here. And she just fired the E10 bio.sprit “champion” that led to the German boycott at the pumps. In fact there seemed to be an attempt to dismiss the French election in the shadow.

      So, France, NRW, Greece, and NOW COMES EIRE !!

      Vote No to add punctuation to the message (an Irish scholarly invention).

  28. redriversix

    Have been asked to attend a seminar on 8 June by social welfare to work and learn from the group as to how to find a job.!……Thank God as I thought I would never work again………

    I think redriversix is on a downward spiral to Lala land………..

  29. Deco

    Spain, is slowly creeping towards a very difficult predicament.

    This is rather unfortunate, but it is a consequence of absurdly low interest rates from the ECB. It caused a property bubble in Spain. This is exactly the same scenario as we seen in this country. Perhaps Spanish property developers were not in “masters of the universe” like their equivalents in Dublin – who were going around outbidding the Arabs and the Russians in auctions on prestige properties like the Savoy Hotel in London, and the top golf club in England.

    But nevertheless, the omens are really really bad.

  30. Clackers Redefined :

    Cradling Risks

    ‘In fact, “net exposure” more closely resembles the image of two drunks leaning against one another. The net balance between the two drunks is the only pertinent risk factor, the apologists argue. As long as the two drunks are leaning towards one another, the two of them can toss back as many tequila shots as they wish. On a “net basis,” they behave as if they are completely sober’.

    • bonbon

      That reminds me of of the terrific fight between 2 drunks where the end result was they had swapped portmanteau’s.

      Like derivative unwinding. I wonder whose shirt JPMorhan Chase will end up in.

    • bonbon

      A zero-sum game!

      • I can imagine Kown & Noonan conversing in bar stool politics . Recently we have heard Noonan serenade his drinking verbage . We know what soon happened the last time Kown did it .

  31. Philip

    So…is the whole idea of the financiers wanting a massive recession a massive shorting exercise so they want to buy it up cheap and draw rent from all of it thereafter? Is that what we are facing?

    In the end it is about what everyone else wanted all along…easy money from rent.

  32. Dorothy Jones

    …and also the article in Sindo 120513 on NAMA….

    No reporting on NAMA can ever be as good as the pieces on the invaluable NAMA wine lake blog but these two articles are worth a read.

  33. gizzy

    Just wondering what attributes do you need to be a Cristian Democrat. Maybe you have to be a followers of Christian values. Jesus threw the traders out of the temple, the Christian Democrats would give them the keys. So not that. Maybe you need to believe in democracy and the rights of electorates to have a say in how their countries are run. No not that either with imposed authority from Brussels.

    Maybe you just have to be a well connected, arrogant, hubristic and self serving.

    • bonbon

      Its a secret, but the CDU changed its name last year to the Climate Demographic Union. To swing with London you see. Probably on the advice of Dr. Schellnhumber OBE.

      Then the Bishop’s Conference got the idea, and at their Conference in Bavaria, changer the cross on the mitre to Wind-turbines. Hardly noticeable to the passer-by.

      So no conflict there ! Its all consensus, as Merkel told an irritated Hollande yesterday!

    • Any organisation that calls itself Christian is bound to be dodgy. The clue is in the name. Christian = Dodgy.

  34. The last four years has felt like suspended reality. Nothing has changed politically but more people are finding alternative media. Mainstream media is like watching cartoons and you feel sorry for any poor bugger who relies on the papers and Pravda RTE. That, like the notion of democracy is for children!

    Vincent Browne’s program is bearable for for for five minutes and you f f feel sorry for a format that looks and smacks of old Ireland. Vinnie is 1950s and I always imagine him with an Eddie Cochran haircut with a purple rinse. They should farm him out and leave him to stutter and slabber on his porch with hot lemon tea and a warm warm b b b blanket

  35. “If they can’t figure out where the risk is, that’s their problem”

    Big talk. Balls of lead. Punk economics rulez and we need to get back to punk. Old punks need to get their minds right after being numbed by the decades of inane and stultifying crap that is in danger of turning our brains to mush

    We can start by switching off the tv unless it is RT on sky channel 512. The Keiser Report et al. More Irish people are tuning into the channel that Hilary Clinton hates. Get yourself some decent shampoo Hilary then we might not dare put a Che Guevara plaque on the promenades of out fair isle. Murdering bitch

    Capitalism is supposed to be about identifying an opportunity, taking a wee risk and winning if you make the right calls. You win by offering something superior to the competition. If you are superior you are less of a risk because you will always be in a winning position. As long as you are modest as well as superior and can walk the walk you can’t fail. People will believe in you in they know you have integrity. If you have integrity in this fucked up world then there is a place for you. That’s the way I like to see it but I realise my naivety. Better to be naive than a c^&t like Hilary.

    Simple stuff

    It used to be that you could set up a new business in a day and get on with it. Does anyone in Ireland really believe that it is as easy as Sir Alan Sugar’s bluff that all you need is a van and €150 to become a millionaire? I think it’s possible but you would need to be exceptional. Like the greek Rio Stakis who turned up in Glasgow after the war with a suitcase full of lace and who ended up owning half of Glasgow

    Tell the honest truth please. Thanks in advance

    • coldblow

      Just on the punk thing. Returning from a holiday (in Ireland) in August 1976 we pulled in at a motorway service station and I bought the Evening Standard (something I hardly ever did). Having absoluely nothing else to do I read an article about some businessmen connected to a clothes shop on the Kings Road in Chelsea were set to launch a New Thing to be called Punk. And sure enough a few weeks later along came this spontaneous grass-roots phenomenon blah blah that was going to shake the establishment.

      Before then there was loads of crap music, but still some great stuff among the dross. You could switch a radio on and here something like Backstreet Luv by Curved Air. (That could never happen nowadays, especially in Ireland, as it would just be dismissed out of hand as wrong, even ‘inappropriate’.) With Punk it was all crap (inane and stultifying in fact) except for a few gems from the subsequent New Wave, eg Echo Beach.

  36. Seems like The Deadly Mix has exploded and scuppered us. Abandon ship. It’s like Das Boot. Bastards. Down periscope and dive to 100 meters. Now!

    Crisis spreads to Ireland and Spain:

  37. Gomb — yeens

    If Inda was a catoon drawn with calligrahpic dashes then the stwawberry haird and square jawed hero of th th west would resemble a ban owl and the bouldy oul king from the plaice beyone the Shannon south would resemble an ageing chicken chewing on a wasp. Or maybe a nettle

    It doens’t matter which because you already see that both these heirs to the legend of Cuchulain are made of the same stuff and better stuff if we are being honest. Birds of a feather. Now that bad king Birtie has receded back oer the Hill of Tara to his Dub den the path is open for swashbuckling blue shirted bravehearts from the wist of the great Shannon river and we are back to where we were long long time ago. We are living unda the sheer greatness of great men it just makes you realise just what it takes to rum an empire

    A lot done a lot more to do (bend over sucker)

    Vote yes for jobs ..
    If not then have another go at getting ya ya minds righ!

    If not then fuck off and commit suicide

    Lick my arse and you will be the frog who turned into a king (or at least for as long as you are of use to me)

    Lick my arse and I might put in a good word for you. Run along now. There’s a good man!

    What a fucking disgusting little shithole. It even makes the Ukraine look civilised

    One baldy bastard … there’s only one baldy bastard

  38. Top civil servant on €60,000 annual pension re-hired for €6,000 a month

    Phil Collins – Another Day In Paradise

    • redriversix

      AT what point in the proceedings,PaulDiv do we actually go over the edge ?

      Whats going on is criminal and frankly nobody gives a shit.

      My father explained to me yesterday that he will be voting yes because Sinn Fein are advocating a No vote !

      Is this a symptom of his Generation,? needless to say the conversation turned into a boy and his dad so I got the flock outta their.!

      These are dark days Paul and I am lost as to how it is going to get brighter

      Have a great day [ not easy ]


      • Your experience reminds me of the reality how close in minds a civil war can be . Brothers fighting brothers , sisters fighting sisters , fathers fighting sons , neighbours fighting neighbours etc etc

        Some family members can have soft secure jobs voting yes and others might be on the dole or struggling hard to make ends meet and just never hacking it out and shouting No.

        • redriversix

          Morning John

          He often shared stories with me growing up in the Country about how Neighbors never spoke because they were pro or anti treaty,How families were torn apart by divide in the civil war through beliefs or Marriage.

          I wrongly thought we had moved on from that,The past should not dictate our future nor should we close the door on it.



          • bonbon

            All caused by Document Number 2, from Lloyd George.

            Just a piece of paper?

            The ESM treaty is also not just a piece of paper. Then no one apparently forced a public reading, now there is no excuse.

            Many here have spelled out the evil terms of this document from the depths of Hades. Making pacts with the Devil is not Irish !

      • Keep your head up RR6. It’s 6 grand a month well spent I am sure. After all who are the likes of us to be questioning the business of such men. If he gets 6 grand a month then I am sure there is very good reason for it. Hit stands to treason and you don’t need to be Newton to know dat. This oul begrudging business is no good for the country so I ask will ye just feckin stop it??

        Some more austerity and moral cleansing will keep you right on your toes and be the making of ye. It will get so dark that you will run into the arms of a higher power. Please try to remember it is all for your own good RR6… naturally

        Only trying to keep your mind right lol

  39. Moon WOBBLE begins on SUNDAY

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