October 29, 2012

Time to defuse the mortgage time-bomb

Posted in Sunday Business Post · 204 comments ·

In the next few years, one of the biggest challenges faced by the domestic Irish economy will be what to do with the tens of thousands of people who are in mortgage arrears now, and the tens of thousands of people who will get into difficulties, but have yet to realise it. So when trying to quantify the problem, we need to have a stab at assessing the ‘known knowns’ as well as the ‘known unknowns’.
The known knowns are rising all the time. Latest Central Bank figures reveal that 128,000 mortgages are in arrears. This figure has been rising rapidly over the past few years, and is likely to keep rising as incomes fall, taxes rise and unemployment continues to grind slowly upwards. The domestic economy, where most of us work and live, is not getting any better – indeed, one of the biggest problems is the debt overhang itself, which is dragging investment and savings.
The picture at the moment shows that 128,416 – or 16.8 per cent – of all private residential mortgages are in arrears. Of those, 45,165 (5.9 per cent) of all private residential mortgages are in arrears of less than 90 days. Some 17,553 (2.35 per cent) are in arrears of between 90 days and 180 days, and 65,698 (8.6 per cent) are in arrears of more than 180 days. The total number of residential mortgages stands at 761,533, so nearly 17 per cent are in arrears already. These are the known knowns.
Now, let’s consider the known unknowns. These are the tracker mortgages, of which there are about 400,000 in Ireland. Tracker mortgages account for close to 60 per cent of the €26 billion in residential loans issued by Permanent TSB. Just over half of AIB’s €27 billion mortgage book is accounted for by trackers, but the prize for King of the Trackers goes to Bank of Ireland, with 62 per cent of its total €28 billion residential mortgage book.
Over half of the total residential mortgages in Ireland are trackers, and 85 per cent of these loans were taken out between 2004 and 2008, so a lot of them are likely to be under water and much more underwater than the average profile. The total value of trackers is now €51 billion. Just to put that into context, if you were to spend €1 million a day, it would take you 139 years to spend that much money.
Trackerville – a new area of suburbs financed by tracker mortgages – is a ticking time-bomb, because all these mortgages are being subsidised by the banks. The trackers are costing borrowers 1 per cent above the ECB rate, so 2 per cent interest per year. Deposit rates for medium-sized sums are higher than that, which is why the banks have to charge higher interest rates on all other loans just to try to claw back some of the money they are losing on trackers.
The vast majority of people with trackers are paying less now per month than they did when they took out their mortgages at the height of the boom, when ECB rates were higher. However, most mortgage durations are 25 years or more. The later the mortgage was taken out, the more chance it has of being longer than 35 years – and some are out to 37 years.
Trackers are time-bombs because interest rates are at their lowest level ever right now. There can be little doubt that, over the course of a 25 – or 30-year mortgage, interest rates will return to their long-term norm for Europe, of above 4 per cent – not least because, if the eurozone economy recovers, there will be a big incentive for the Germans to wring whatever inflation there is out of the system via higher rates.
This will cause mortgage defaults in Trackerville, at a time when we thought it was all behind us. It could be in four or five years’ time – we will be reminded that the biggest mortgages in absolute terms are the trackers so, as normal interest rates rise, arrears and defaults will rise more quickly in Trackerville than in the rest of the country.
This is the challenge: not just to fix the arrears problems now, but to fix the problem in full. It is not just the right thing to do, it is essential, because we can’t have domestic spending recovery without sharing the debt burden.
So even those of you who feel uneasy about the prospect of a grand ‘debt bargain’ must realise that, in the present situation, everyone loses. This is because the economy and your income can’t recover if people are not spending, and people can’t spend if they have too much debt.
In any economy, we are all surprisingly dependent on each other. My spending is your income and vice versa.
In addition, the longer this goes on, the more the banks become zombie banks incapable of breathing credit into the market. A deal must be done right now.
The banks set aside €16 billion in the last capitalisation round to cover bad loans in the residential market. Taking the total mortgage lending book of €112 billion, the implied total default on the entire book is about where we are now in terms of arrears, 16 per cent. However, not all these arrears will be total write-offs, so there is enough cash in the tank now to do a debt for equity at 50/50 right now. This gives the punter a break and the bank an upside option over time.
But maybe the reason the banks have been tardy in moving – after all, they were dressed down by the Central Bank last week – is that they think €16 billion isn’t enough. If it isn’t, we need to go back to Frankfurt and come up with a figure that covers all bases and say to the ECB: “We need more cash and you will have to cough up.”
We know the Germans need a success in Ireland. We know that we can only have success if the total banking problem is solved, and we know that the pending mortgage crisis has not been addressed yet.
Wouldn’t it be sensible to put it all in one big bang solution?

David McWilliams’s new book, The Good Room is out now. He will be hosting www.kilkenomics.com next weekend in Kilkenny

  1. Reality Check

    I don’t believe it; i’ve beaten “Adam subscribe” here!

  2. Dorothy Jones

    David, Time for you to have a chat with Schäuble instead of all the posturing at Farmleigh today…..Farmleigh….Sure the man will think the country’s loaded! Ireland’s most expensive home?…….:


  3. Beaver

    I know people paying 0,5% above ECB rate on trackers. Variable rate mortgage holders are paying part of the cost of this and the taxpayer is picking up the rest. I dont agree that everyones losing in the current sitaution. The tracker holders have borrowed very cheap money from no tracker holders.

    • Fair point Beaver,

      Best David

      • Tony

        “The tracker holders have borrowed very cheap money from no tracker holders.”

        I’m always intrigued by this type of comment. When my neighbour got his tracker, he didn’t know that somewhere down the road I’d be paying for it. But that’s how it works. He cant be blamed for it, but comments like Beavers suggest to some that it’s the fault of the tracker borrower. Lets be clear; it’s not. If I buy a car and get a great deal and the dealer covers his margin by not giving so good a deal to the next guy, that has damn all to do with me.

        Use of this type of language, even if only in economic terms, and because most people don’t understand economics, is exactly what leads to the dinner table arguments and conversations of “unfairness”, which in turn has the potential to lead to the modern equivalent of the urban/rural divide: the tracker/variable divide.

        So, once more, with some feeling I might add, my neighbour got a better deal because it was available to him, and not to me. He has borrowed nothing FROM ME.

        • pablos

          I agree very strongly with this comment. It has been on my mind since watching David on the late late. There was some woman who was afraid that some other people might get off the hook when she had to scrimp and save. This kind of thinking is going to drag us all down. Life is unfair – what about the guys who got us into this mess, sitting back on their cash? As David said, we are all connected – if enough people are driven to bankruptcy then everyone suffers. No point having your house paid for if you or your children don’t have a job or any reasonable income. It has happened in the U.S and people have been stranded with their mortgage free homes in the middle of an economic blackspot and they have just got up and left them behind. If we now realise that people have to be educated about economics, it now looks like we have to start educating them about psychology as well.

          • Adam Byrne

            Yeah, that woman was an idiot. Typical begrudger. The kind of moron that will vote Fianna Fail back in.

        • Beaver

          If the bankrupt banks had been left collapse the taxpayer would not have had to pay their losses. Part of their losses stem from the tracker mortgages. People who signed up for variable rate mortgages knew what they were getting into, they only had to talk to their fathers to learn that in the early nineties interest rates went to 15%. People who got tracker mortgages went for what has thus far proven to be a good deal and will likely remain so unless we exit the euro. If the banks bankrupted though I suspect the reciever would sell the loans off for a fraction of their value to a third party and they would price in the low interest rate. Bankrupting the banks would have meant bondholders and shareholders paid the cost instead of the taxpayer. I have no mortgage but my taxes are being used to pay for the banks bad decisions.The money being used to subsidise trackers can be linked to the cuts in care assistants.I dont believe the average tracker holder got a better deal than me. I believe he was offered debt cocaine to buy over priced housing. Current low interest rates are cold comfort for negative equity.

          • Thriftcriminal


          • Howya

            If the ECB were to raise rates to 5% then those on trackers would be paying 5% plus margin (typically but not always around 1%). Variable rate mortgages are not “paying” for trackers. Trackers are losing money for the banks because the banks’ cost of funds has increased. An ordinary business can take out a long term loan with a fixed margin over and above euribor/libor. This is effectively a tracker but you don’t hear anyone claiming that overdraft rates are paying for business loans.

  4. Direland

    Even if “Seismic Shift” Enda was to come clean with Europe and agree to have “defaulter” written across our foreheads ( as He should have from Day 1), I doubt if the ECB/EU will agree to recapitalise the Irish Banks to the required level to take account of the Mortgage default time bomb you correctly identify. The ECB/EU seems to specialise in post event crisis management not in being ahead of the curve.I have a tracker myself and I am wondering if the Bank would like to “buy” it back at a discount – in other words I have a problem but could raise some money – say 75% or so of the residual balance outstanding despite the fact that the property in question is in hegative equity.One of the problems is that the Bank would probably not want to “book” a loss on my loan ( it is currently performing but will not continue to do so soon) and also that they probably “eye up my primary residence as part of thier security even though they cannot get Me out of it as a Family Home.Unfortunately Banks , no less than Government , keep hoping that with the passage of time “something” will happen to improve incomes , employment and House prices.They are not as analytical as you and that is thier problem and therefore our collective problem.IO suspect we shall just drift from crisis to crisis and somehow expect it will be alright in time as past crises were – but the carnage to individuals lives is tremendous in the meantime but for the so called decision makers in the Dail and the Madarins on Mewrrion Square this is irrelevent – they are on cushy incomes and insulated from everything happening all around them.

    • Grey Fox

      Direland, one point of warning, don’t rely too much on the Family Home protection you believe you have, the courts are doing a good job of trampling over this on a regular basis.

  5. Jimmy R


    I’d be interested to hear your opinions on a debt jubilee or “quantitative easing for the public” as espoused by Steve Keen.

    Something maybe where everyone in debt gets a write off of a certain amount, reducing their monthly repayments and at the same time, in the interest of fairness, those without debt would get cash. In the first instance it would reduce the debt burden on people’s backs, those repayments would help capitalise the banks indirectly, while the cash injection to the previously prudent homeowners would see a stimulus to the economy.

    If this was done in a way that everyone who registers for (lets say) a land valuation tax takes part, then not only would the land tax help pay for it, but the boost to the economy in terms of vat, income tax, corporation tax etc over time would go towards paying off this initial capital investment in our own economy.

    Would you see any major pitfalls in this idea and/or would this be a viable solution to the current state of affairs?

  6. Of course the mandarins are insulated and we have no statesmen to get on with leading the country out of the mess. No one to build a new Shannon Scheme. Lets not talk about laying off civil servants. Lets put them to work! We have enough in the dept of Ag to double beef output. Enough Windpower to power Germany when they shut down their Nuke plants. are we going to allow the French to build more Nuke plants to make up the short fall_. Surely there are enough people with good ideas to generate enough to earn our way out of the trouble with the help of a good statesman. Lets stop the talk of despair and default. Come one David lead the ” charge over the top”.

    • Deco

      We accumulated massive debts, and we do not even have enough wind turbines to power the country to show of it, on a windy day. (I think we can get as high as 38% or something like that, if everything works out well).

      And then we import fossil fuels, and heat up the planet. Even having the Greens in charge for four years, and there was no proper levelling of the playign field for wind power – because FF cosy were in bed with IMPACT and other unions.

    • Tony Brogan

      Here is a new national project. Long term benefits.
      Over the last 800 years Ireland had its resources stripped by the anglosaxonnorman.
      I’m talking trees.
      Traveling accross the country this last month I have seen the extensive mountains with nothing but peat and heather. Extensive lowland peat bogs.
      in parts of Mayo I saw where large machinery working in boggy fields had torn out hundreds of large tree roots and stumps.. They were preserved in the acidic bog waters.
      Around the perifery of these fields can be seen growing willow and alder. In some places there has been reforestation but mostly fast growing coniferous varieties such as pine, Douglas fir and larch.Coniferous trees create acidity from the needles.

      What need to be planted are trees that will lower the accidity such as the green leafed native trees which are alkaline.. Foresters will know what grows best where.
      Here is a job for the unenployed youth sponsored by government. The jobs do not have to be long term permanent but could be 3-3 month summer contracts as well as full term. Ideal for students to help pay their way through school.
      Implement a nation wide reforestation plan. All trees planted by paid workers on land allocated by owners. Owners will receive the free plantings in exchange for a comprehensive management plan that would be registered on the property title. As time went by this would create a growing valuable resource.
      A national resource regained that would take 20-40 years to complete, and 2-500 years to mature.. Better than bailing out a bank.
      Paid for by money issued interest free and debt free from treasury.Money circulating in the local economies.

      • Adam Byrne

        Good ideas as ever Tony but again, not a hope of being done. The powers that be have no interest in doing anything positive for the country. They all need to be strung up first before anything changes, starting with Kenny and Gilmore.

        Abandon Hope All Ye Who Enter Here.

  7. uncle fester

    No problem with debt write off but they have to lose the asset.

    • gizzy

      Without emotion if you examine bthat logic. They lose the asset to the Banks who then A) sell them putting more houses onto the market and 100,000 houses would have a major impact on the housing market driving prices lower. B) A the banks rent them, making the biggest contributors to the economic downfall the biggest landlords probably in the world in terms of numbers of units.

      The government then has to rehome lots of people at a huge cost. So they reposses say a three bed semi from a young Dublin couple in Edenderry who then move back to Dublin and go on the housing list.

      Every action has consequences that need to be weighed up. And describing peoples homes as assets may make your recommendation sound like a clean business transaction when it is anything but.

      • uncle fester

        Why should people who can’t pay their debts get to have their debts written of, keeping the asset and paid for by those who didn’t overload with debt?

        Huge moral hazard. There’ll be no incentive to any to pay their mortgage.

        • StephenKenny

          It will get worse than that. Once things have settled down a bit, people will start to pile back into property ‘as an investment’, but this time knowing for a fact that it really is a no lose bet.

        • redriversix

          The banking system has been unable to pay their debts for a long time !

          They got & continue to get bailed out.

          Moral Hazard is only used to turn neighbor against neighbor and to distract from the real crisis,which is a global financial war against Countries and then their people.

          I for one,value people far more than Failed Banks.

          If thats “moral hazard” I promote it at every opportunity.


          • StephenKenny

            You seem to be suggesting that moral hazard isn’t a problem for banks. It is a massive problem. The financial services companies that were bailed out are now doing every extreme thing they were doing before, but to a significantly greater extent, and in the certain knowledge that they can’t lose.

            Bail outs of Failed People is no problem, we should just make sure that it doesn’t cause even more problems a few yards down the road.

            Prof Steve Keen has an idea that is very hard to argue with, on this point: http://debunkingeconomics.com/

          • paddythepig

            Banks contain people’s money, they are not abstract entities. It is meaningless to say you favour people over banks. What you really favour is yourself, you just use your gobbledygook logic to convince yourself that your self interest is everyone’s self interest.

        • Grey Fox


        • Thriftcriminal

          I’m with fester on this.

        • michaelcoughlan

          You again.

          The people who can’t pay their debts were the banks which is why the two CEO’s had to go to the government to bail them out with the guarantee. And your point is?

          • michaelcoughlan

            The more I think about your posts Uncle Fester the more intensely angry I get. You speak of moral hazard as if that only applies to the mortgage holder and not to the jurisprudence or lack thereof in Ireland’s case of the people in charge of the banks during the boom.

            By putting forward a point of view for handing a house back to a bank or banks responsible for the crash whilst simultaneously talking out of the other side of your mouth about moral hazard makes it impossible to take your post or point of view seriously.

            Did you forget that YOU and YOUR family are now just like everyone else’s are the people left to foot the bill because moral hazard in lending institutions in our great Republic during the boom? I would think that if the banks were adopting the following approach; http://en.wikipedia.org/wiki/Predatory_lending then of course it suits the banks to have the mortgage holder hand back the asset doesn’t it? Any chance you work or have ever worked in a bank?


      • Deco

        apart altogether from the fact that the bank are stuck with a house in a town that nobody wants to live in of their own free will…and which will have to be given to somebody on a housing list in Offaly.

    • Reality Check

      +1 on that uncle fester

    • Grey Fox

      And what does the bank lose! Think about your answer carefully.

  8. CorkPlasticPaddy


    Of course there are enough people with good ideas to generate enough to earn our way out of trouble, but those people will never get a chance to do so and the plain and simple reason for that is that the wrong type of people are running the country and those type of people have been running the country since the foundation of the state!!!.
    Our politicians simply haven’t got a clue and as for that shower of ‘mandarins’ who are actually running the country,well, if you watched the TV programme that went behind the scenes at the Department of Education you would’ve seen what I mean. They were very uncomfortable having TV cameras watching their every move!!! What a complete and utter shower of wasters!!!
    The only way this country is ever going to change is by the Irish electorate coping themselves on when they go and vote at election time and they can do that by they going away and voting for independant candidates instead of political parties. It’s a very simple of changing things, but no one does it!!! You can’t trust any of the political parties, so, just don’t vote for them!!! That’s the only way we’re ever going to get any REAL CHANGE in this country!!!!

    • this will take time changing our ‘political culture’ trouble is with elections 4 or 5 years apart our economy and country slides further down hill ,yes we need fresh thinking in our dail but more importantly our Senior Civil Servants have to get their marching orders.

      • Steaf35

        Our political culture requires new blood / party to honestly represent those that still give a damn; Sent an e-mail recently to the Irish Democratic Party but received no response or even an acknowledgement; Fis Nua seem to be a little more active with a convention in November; There is also Sli Nos Fearr (SNF) of which I know nothing about …yet! Politics has to change and unless the majority of the population engages in it more than by putting an ‘x’ on a box every 4 or 5 years it wont……!

        • Adam Byrne

          Sent an email, you being a prospective member, or contributor (I would imagine) – and didn’t even get a response? Laughable but typical in ‘these here parts’.

          Politics is a complete and utter waste of time. Populated by liars, chancers, incompetents and corrupt gombeens. No wonder David didn’t get involved at the last election – great decision.

          • Steaf35

            Only a prospective member/concerned Irish citizen; Yes I agree, politics is “Populated by liars, chancers, incompetents and corrupt gombeens”…….that is exactly why we need a new politic to develop new methods of governing this country; The Greeks are marching & we’re taking it all like some sheep on the mountainside……!!!

    • Adam Byrne

      Also agree, but it will never happen. Do you hear me – NEVER! Get out if you can.

    • Grey Fox

      absolute agreement

  9. Tony Brogan

    Trackerville — a new area of suburbs financed by tracker mortgages — is a ticking time-bomb, because all these mortgages are being subsidised by the banks. The trackers are costing borrowers 1 per cent above the ECB rate, so 2 per cent interest per year. Deposit rates for medium-sized sums are higher than that, which is why the banks have to charge higher interest rates on all other loans just to try to claw back some of the money they are losing on trackers.

    What about the fractional resrve banking system
    At a 10% reserve the gross income is 18-5= 13 %
    At a 5% reserve the gross income is 38-5= 33%
    On every euro deposited

    Where am I wrong here David

  10. This is simply one of the Biggest rip off’s on the Planet, how can we a country with just over 4 Million of a population have loans from just our top three banks totally 81 BILLION the sums just don’t make sense, we couldn’t owe on land and property purchases 20,250,000.00 each!.
    Problem here in Ireland we’re still too busy looking after our selves than thinking of our communities, and with a Dublin based media ‘rural’ Ireland will be brought further down, recession, depression,emigration,drug addiction,crime and suicide and our elite will allow society to go this way.

    • Tony

      New calculator needed there Brendan. That’s the problem with dealing with numbers that are incomprehensible. Your number should be about 20k a head.

    • Deco

      massive borrowing is a financial measurement of the excess of a population.

      It was proceeded by intellectual excess. And this was fed by the Irish media, and vested interests.

      Therefore, to dissent from the mainstream programming (support our advertising sponsors) is the gateway to intellectual freedom. And this in turn is the gateway to financial freedom.

      Ponzi schemes work as long as suckers can be misled into supporting them, by believing in anything that the broadcast.

    • Eireannach


      the 81 billion is 81,000 million, not a 81,000,000 million.

      • Beaver

        Actually there are two definitions of a billion. A thousand million and a million million depending on what continent your on. The billions we discuss are only 1000 million billions.

        • coldblow

          As I mentioned here a long time ago, this is the case. The British billion was a million times a million but the US version gradually took over. However over many years the two were used side by side (a bit like when they introduced summer time, or whatever, and country areas were split between those who moved their clocks forward and those who stuck with the old time – people would miss mass over it). Most people don’t attempt the per capita calculations so it’s just gobbledegook. For example, the famous 8(?) billion that Ireland stood to gain from Eurupe 25 years ago was for most people merely a large number in the Biblical sense. I think this played a significant role in breaking the links between economics and everyday reality.

  11. Deco

    People are sinking into a quagmire of debt. We need to fix the labour market for the mortgage holder. But it is failing the mortgage holder. The labour market is victim to the agenda of IBEC, and the stupity of public sector union bosses.

    The real problem is mortgage holders without sufficient income.

    • Eireannach

      and yet Deco,

      In Dublin north city centre – Abbey St Arcade, Talbot St, Parnell St, Moore St – there are more and more all-you-can-eat Thai, Arabic, Indian, Chinese, Mexican and Philipino eateries opening every week.

      These are the best value street or off-street eateries in the history of Ireland. A huge Thai beef curry now costs €4.50 on Talbot St. These places are like mushrooms springing up after a storm.

      Let’s get something radiantly clear, the people sinking in Ireland drive Mercs, BMW, SUVs, VW Passats and have dinosaur mortgages, but their salaries are high by European standards, even if their debt is so high it eats away almost all of the salary. The ‘New Irish’ can still run profitable businesses and are out-evolving this older generation of Irish, out-competing them on salaries and quality of food and other servies, etc.

      Ireland’s problems are based in local cultural nonsense during the Celtic Tiger. Neither DMcW nor the ECB nor Wolfgang Schauble can put our humpty dumpty mercedes-and-golf-clubs had a great fall culture back together again.

      • Adam Byrne

        Great news about those eateries, not that I ever go into the dump that is central Dublin.

      • Adam Byrne

        Long live the New Irish. Thanks for that Eireannach.

        • Eireannach


          Remember the Italians arrived and set up chippers, some of which were good, most mediocre?

          Marhaba on Dame St, all you can eat Arabic and Indian buffet, for €6.50! All day.

          Phone and laptop repair shops, like you’d have 1000s of in every 21st century Asian Blade-Runner megacity – €20 for a full diagnostic and repair, excluding parts.

          I’m a French language national coach tour guide. Pardon my French, but its f**king booming. I’m opening a Game of Thrones Youth Hostel and Day tours of film locations in Antrim and Down – again, f**king booming.

          Note – I don’t care about the English premiership soccer. I told Irish people about the massive money tree that is Game of Thrones being filmed in Northern Ireland. In one ear and out the other – they were wondering if Team A could score against Team B.

          The Irish are still not switched on and getting the finger out because despite all the moaning, they are still complacent!

          • Adam Byrne

            Brilliant, I may just get out the Kevlon suit and venture in some night, talking care to avoid the puke and rusty syringes. I love people and cuisine from other countries. I’ll try any food and have a conversation with any hard working immigrant. As for the local shower… I think you summed it up well Eireannach. Sok szerencet kivanok neked!

      • Deco

        Eireannach, one would hope that the sudden liquidity crisis might make people in the expensive suburbs realise that they have lifestyle aspirations that are completely at odds with their own work ethic.

        But, I suppose this sort of thing requires the sort of humility that many have been programmed for years to regard as demeaning. You have a point. But very few people in the dumb consumer category have realised any of this yet. They have not realised that pride/arrogance and superficiality are preventing them from surviving. Even when the example is provided to them….they do not get it.

        • Eireannach

          They haven’t fallen far enough yet Deco. So far its just ‘oh I have to pay these bills and its, like, so haaaarrrdd’!!

          I read recently that the new look for women this winter is ‘Joan Harris out of Mad Men’. I haven’t seen Mad Men, I suppose it’s a good TV series, and the look, as I understand it is 1950s hour-glass with tidy beehive hair and pearl ear-rings.

          I’m thinking to myself ‘how many of the 140,000 Polish in Ireland are shopping for a Joan Harris from Mad Men look this Winter’?

          In that instant, the instant of that thought, I realised the native Irish have totally lost the plot. Most of the people knocking about Dublin barely speak English, Joan Harris from Mad Men might as well be the woman in the Moon.

          Yet the Irish shop on, in epic levels of debt, oblivious to the fact that the Ireland they live in in their heads is totally over FOR EVER!!

          • Adam Byrne

            Mad Men, great show. I watch it free on the net. Wouldn’t pay for it. Wouldn’t have a clue about clothes. Don’t buy them, just inherited enough for the next ten years from my Dad and my classmate gave me a brand new suit that he had grown out of. Consumerism is evil.

          • Adam Byrne

            I think you should change your name to Euronnach. Europe in the sense of the ancient continent, not the twats in Brussels. Good on you mate. I like your international thinking.

          • Tony Brogan

            Are but consumerism is the mantra of our good David.
            your spending is his income. Especially when you buy his latest book!
            Never mind that you have to save before you spend. Err..Sorry the credit card slipped my mind.

          • Adam Byrne

            Never had a loan, nor a credit card in my life.

        • Adam Byrne

          They don’t have a work ethic, full stop Deco.

          • Adam Byrne

            Where did it all go wrong. I was away for over 20 years and I came back to this? What happened to this country? I know the ins and outs of the financial mess but what happened to people’s souls (metaphorical) and the culture? It’s a fucking disaster.

          • Adam Byrne

            I literally cannot stand to be near these sheeple any longer.

        • Grey Fox


      • Dilly

        Dont forget Capel St there is some great food there too.

  12. Grey Fox

    All the talk has been spun into how to save the overburdened homeowner, this is an indirect saving of the Banks who caused the problem with the Fractional Reserve Banking, Mortgage Securitisations etc… dirty dealings, F*@K THE BANKS!
    Let them sink, even now! They should have been let die in 2008 instead of perpetual life support which we now know does not work, the Banks robbed us and still are and our Government of wannabe statesmen are totally inept having given away or sold all our natural resources and morphed into a vichy government following the surrender of our sovereignty to foreign crooks.
    That is the truth of it no matter what way you carve it up or spin it!
    The Banks need to be shut down, replaced, and the assholes responsible for them during the theft need to be prosecuted to the fullest extend of the law along with their complicit politician pals instead of paying them collective millions in golden handshakes and pensions.
    David, for once I am annoyed that you will not and have never broached the subject of blatant wrongdoing in the Banking Sector and not just the poster boys we all hear about but every executive in every bank involved within our jurisdiction, even down to the idiot who sat across the table and mis-sold PPI and who will rely on the excuse that they were only doing their job, ignorance cannot be relied on as a defense for the common man in court nor can it be relied upon by our so called well educated banking sector.
    There is not relief or remedy for the thousands losing their homes but the banks still have the cosseted ear of politicians, the media and the Judiciary.
    Our society makes me puke but I am not going anywhere until I am sure it is beyond saving, at the moment I am seeing the contrary, more and more people on a daily basis are saying and doing things which would have traditionally been unheard of, unrest and dissatisfaction is spreading regardless of the media blackout in force.
    That’s my rant over for today!
    See the post on http://awakenlongford.wordpress.com/2012/10/29/mortgage-securitisation-among-other-things/ for a sample reminder of the disgusting, pompous tripe which was trotted out on a regular basis by all concerned from 2000 onwards.

  13. pablos

    Why did we give the British so much credit for Divide and Rule, the tactic is a no brainer. If we hear that corporation x is getting a subsidy (of course it won’t be called that) of 31 Billion, sure we’re pissed-off but we’ll get over it. But when we hear that some pox down the road will get to keep his/her house as the bank has agreed to take 50% of the house we go into paroxisms of rage. How will we ever get anything done if people let themselves get distracted so easily? Maybe now you can understand how the Germans see the situation. In their eyes, YOU are that waster and spendthrift that is looking for a handout. This situation is almost certainly going to get a lot worse in the coming years and make your current troubles seem totally insignificant. There was that guy on Friday nights late late who had bought a house with his Dad as guarantor. Some fool on the panel said that he knew what he was getting into – did he really – did he know that the economy was going to be pulled away from underneath him? Sure he knew there are risks, but back then everything was so rosy. The fault for this lies completely with the Govt. They encouraged people to borrow, they removed any regulatory oversight, they gave the vested interests everything they asked for – it was almost like housing boom in 80′s Britain never happened. People were canvassing on O’Connell St. to get people into banks to take loans, I was regularly receiving mail to take out a gold credit card when I was on a modest wage. Most people go through life with their eyes closed, who then is more to blame, the professionals or the punters?

    • pablos

      Couldn’t help myself: “A great disaster is rolling like a breaker towards their heads.” Only half tongue in cheek – the end is nigh;)

  14. I like the notice at the top of the articles page. My first thought was ‘Oh, something new and fresh’. Your menus and sidebar make more sense now and the site is looking well organised. Well suited and booted. Should keep the perfectionists happy

    I am glad you enjoy the insults too and realise that they are to be expected the way life is turning out in out uber conservative little dear green place. Politics.ie tells us what vicious minds some people have but you know that in here the insults are only half meant and are often regreted after the fact

    I was reading a three part article about Peter Kropotkin and Anarchism and the second part begins:

    When confronted with an increasingly despotic régime, the good people of almost any nation will cower in their homes and, once they are flushed out, will allow themselves to be herded like domesticated animals. They will gladly take orders from whoever gives them, because their worst fear is not despotism–it is anarchy. Anarchy! Are you afraid of anarchy? Or are you more afraid of hierarchy? Color me strange, but I am much more afraid of being subjected to a chain of command than of anarchy (which is a lack of hierarchy).


    It reminded me of Ireland and I checked my email and saw your update and one connection led to another.

  15. molly

    Tracker mortgages are a time bomb yes and will the government do something about it no,not untill it becomes a big problem .
    This seams to form a pattern on the government and reflects on the poor performance to date.
    The Germans are running Europe and that’s quite obvious and Europe is being controlled and being told to dance to there tune because they are the money people of Europe .
    Reckless lending and reckless spending go hand in hand,so people bow to your new masters.

  16. This is depressing. The mainstream press the other day tried to talk up the export figures but the export figures mean not a lot to ordinary people in Ireland. I also read that most home owners in Ireland have little or no mortgage. I am decent at maths but things are not adding up here. Who is right?

    When you say ‘private residential’ does that include people who bought houses to let?

    The fact that around 340,000 mortgages were taken out between 2004 and 2008 suggests to me that people were going down the buy to let route when the banks were at their most reckless

  17. Clare Leonard

    South Dublin County Council charge 8,000 euros for
    rates, water rates and discharge licence, on an 800 sq. foot premises.
    Yes, they charge you for the water and then charge you to put the water down the drain, they call it a discharge licence, it costs 12 cents to flush a toilet. On a profit margin of 5% that means
    one has to take in 160,000 euros -just to pay the county council.
    The reason the “new Irish” can run a profitable
    businesses is that the premises change hands as soon
    as the officials start knocking on the door looking for their taxes.
    That is a luxury the “old Irish” cannot avail of.
    South Dublin County Council erected a piece of ‘art’
    on the Naas road, a few months back.
    The big coloured balls, near Rathcoole.
    A German artist designed it. A German construction company manufactured it.
    We the tax payers in the SDCC area paid for this.
    It cost the council 178,000 euros to erect this.
    Now do the figures.
    22 businesses struggling to pay 8,000 euros per year
    cannot survive because their costs are too high,
    approx. 3 people per business loose their jobs.
    Now, you have 66 people out of work, because noone
    in government has any idea how difficult it is to make a profit in the current environment.
    The government say it costs them 20,000 a year for
    each person unemployed, the loss of revenue from lost taxes etc. plus the cost of social welfare.

    That means the government loose 1,220,000 (66 people by 20,000) on an annual
    basis, as a result of one stupid decision to erect a piece of ‘Art’, in the middle of a depression, without any regard for the welfare of people who have to pay for it.

    Before you attack me re.the importance of ‘Art’=== I purchase a piece of
    Irish art most years, whether I can afford it or not.
    These day my business is closed.
    Time to sack the lot of them, or at least make them

    • molly

      Yes you are right ,what some people don’t realise is this government are only interested in exports because they see it as the savour of Ireland .
      Why would a government in a protective bubble care and further why should fine gale care when they are riding high in the opinion polls.
      The only way to change things is to protest ,go on strike,mass protests untill this happens you and me and like minded people may as well be talking to a wall.
      Fine gale ,could not give a rats arse about labour,when push comes to shove they will go in with Fianna Fáil ,rats comes to mind.
      New party’s can be formed and make a start but its to slow and takes to long,we need change now .

    • Deco

      SuDuCo are idiots. Idiots with respect to job creation. Idiots with respect to business.

      And then there was the mess they made of the snow the other year. You drove from Kildare (roads all working) into SuDuCo space, and found that SuDuCo did nothing. The M50/M4 interchange – the busines junction in the national road system – was under slush. Even rural counties with much less resources, more roads, and other disadvantages were far better organized.

      I remember three years ago, a poster giving us his views from a meeting he had with FAS centre/SuDuCo program for starting his own business. I think he was in Ballyfermot. He described the BS, and chronic amateurism, that he was made endure. He was in a fit of despair. Several of us tried to give him some positive encouragement.

      It does not surprise me in the slightest.

      • Deco

        Actually meant the M50/M7 interchange.

        From memory the M3/M50 interchange had no problems. And from memory SuDoCo did nothing for their stretch of the M50. Jokers. I don’t care if they were not responsible. They probably all drove up and down on it, but never seen the problem under their noses.

        And then we have the corruption. Let’s just say “it stinks massive”.

    • Dorothy Jones


      Clare; I assume this is that to which you refer? I had references sent to me by mail by German colleagues in disbelief at the expenditure.

      Did you mean that your business closed today or was closed?

      Apologies for all the questions.

    • Dorothy Jones

      Budget on the SDCC link above is indeed 70-150k€. I love Irish Art and spent any bits I had on it; but….well, with this one….it’s an affront to businesses struggling in the area.

  18. Harper66

    The central thesis of this article is correct. Mortgage debt is a ticking time bomb. Banks are looking to claw back the money they are losing on tracker mortgages by raising costs across their other products, most notably variable rate mortgages.

    This is not the only effect the overhang of mortgage debt is having on the economy. As far as I can see the costs of these mortgages are also one of the influencing factors in wages remaining high. People have high mortgages therefore they are fighting to keep their pay at pre 2008 levels.

    I have no doubt mortgage debt is one of the main issues facing this country and nothing is being done about it. Two successive governments have sat on their hands on this issue. From what I read the personal insolvency bill will do little or nothing and has been closely scrutinised by the banking fraternity to ensure their interests are protected.

    The question is what to do about this debt. I do not believe the answer is writing off debt and allowing people to keep their houses.That would just create more fudged decisions. The answer is to allow the debt to crystallise in as painless as way as possible so that people can start again. People should be able to hand back the keys to the houses to the bank and walk away free to start over. This would cause the housing market to bottom out and find realistic prices. Pay could then be realigned to this new reality and most importantly people would be out from under the crushing weight of this debt.

    The problem for the banks is that the debt would crystallise. Hence it will not happen.

    • Grey Fox

      Try to float this idea to someone in the 40 to 55 age bracket and who is unemployed then prepare yourself for a very strong reaction!

      • Harper66

        Hello Grey Fox,

        I understand your point however I do not believe there will be a mortgage amnesty ever.I think the political will will never be there. Also I think the banking lobby is far too strong in Ireland to have such losses forced upon the banks.

        Instead I think people in the group you speak of will be forced out of their homes at some stage down to line and screwed for the outstanding money. I find this a more appalling vista.

        • Grey Fox

          I agree wholeheartedly with some of you comment, however “at some stage” is optimistic to say the least, it is happening right now!
          The numbers are big, and, these people are quite literally on the scrapheap!
          This is not right and the appalling vista you fear should never occur, every man woman in Ireland should be fighting furiously for this group and indeed all groups, again I say, the banks do not deserve any sympathy or assistance in any form, they and the people who lobby or directly assist in any continued support for the guilty banks and perpetrators of the downfall of our nation should be hounded from their ivory towers and never again allowed to hold any position of responsibility.
          I sincerely hope you find a way to change your view and start to believe that we the people can bring the change and support our fellow citizens in their hour of need, and I know that I will have the detractors who will spout survival of the fittest, only the strong survive etc.etc. and that is fine in the animal world but we live in the human world and unfortunately the strong surviving means the one with the most money and connections, and I will never accept this in any form. We have the ability to change for the better, Clare Leonard, Tony Brogan, Redriver6 and many more speak the sense we need to permeate our entire society, their is abundant room for differing views as long as they are not based on Greed and Cronyism.
          I just sincerely hope that the cream of humanity floats to the top and prevails.

  19. Clare Leonard

    My business is closed because I cannot afford to
    open the door.
    The moment I open the door I have
    to start paying the council. It is difficult enough
    to work without making a profit, however, to work
    knowing I will make a loss would be madness.
    To add insult to injury the council will send in the sheriff to seize my belongings should I fail to pay them, so my door must stay closed.
    Hence 3 people loose out on the possibility of work,
    and I try to change this crazy country.

    • Grey Fox

      My business closed 3 years ago and the receiver moved in last week and in total 7 people lost their jobs and I too still try to change this corrupt country!

    • Steaf35

      Hi Clare; I have experience of going into businesses and sorting cash flow (a high success rate although not always); If you think there is any hope I could take a look for no fee; A certain amount of loss is not total madness. Regards,

  20. Kropotkin continues …

    Kropotkin pointed out that the term “survival of the fittest” has been misinterpreted to mean that animals compete against other animals of their own species, whereas that just happens to be the shortest path to extinction. This misinterpretation of facts directly observable from nature has led to the faulty Hobbsian justification of the economic appetite as something natural and evolved, and therefore inevitable, giving rise to the conjectured laws of the marketplace, which in turn favor nonempathic, exclusionary, brutal, possessive individualists.

    The result has been to enshrine mental illness–primitive, pathological, degenerate narcissism–as the ultimate evolutionary adaptation and the basis of the laws of economics. Thus, an entire edifice of economic theory has been erected atop a foundation of delusion borne of a misunderstanding of the patterns present in nature.

  21. Clare Leonard

    The 178,000 euro cost includes the erection,
    which would include site clearance, electric
    connection etc etc.
    I got the figure from the council.

  22. Tony Brogan

    THE BASIC PREMISE IS SIMPLE. YOU ARE BEING SCREWED BY THE BANKS. Not with the mortgages, tracker or otherwise but with the system that allows the central banks control of the currency, that allows central banks and your neighbourhood commercial bank to print unlimited credit , debt based money.


    I repeat from the previous posting

    The solution is pretty simple.
    The Irish government tells the Europeans to go to hell. we are not playing your game anymore.

    We will not pay any more public (aka taxpayer) money to a private business for their losses. That means no one!! not the banks not the homeowner, no more subsidies.Repudiate the odious debt.

    Do an accounting for the money already paid to the banks on for their losses and register a charge against assets.

    If the banks can not repay then sieze the assets and sell them to recover the money. That is do to the banks what they do to you.

    The bankrupted bank is out of business, the bond holders are burned (to use your terminology) and the taxpayer recovers some misplaced payments.

    The government may now own a bunch of mortgages (assets of the banks) and now sells them off at market value to any investors willing to take them. (that included the current mortagees, who get a once in a lifetime chance to buy back their own discounted mortgage)

    Net result. Government is less in debt and the property owners get a chance to be bailed out at no cost to the taxpayer.
    Change the bankruptcy laws to those similar to Canada for example. People who made bad decisions will pay a cost but not be wiped out for life.
    The country breaks free from the clutches of the European banks and the IMF.
    It may also be the chance to break from the bond of the euro.
    Ireland issues its own debt free money and allows silver currency as previously descibed several times here.
    Those in Ireland receiving European subsidies will have to make do without and the country flexes its muscles and goes it alone as it is quite capable of doing. That is exactly what every emmigrant does by voting with their feet.”I am fed up and going to go it alone and make a go of it.”
    Maybe a few of those entrepreneurs would stay home if the country and its people showed some guts.

    Where is David McWilliams on the issue of odious debt?
    What is his position on fractional reserve banking? dead silence here.
    What is his position on central bank debt based financing versus debt free currency from Treasury?

    I believe that you do not understand the operation of fractional reserve banking.If not you will be of little help in understanding the banking system.

    “The trackers are costing borrowers 1 per cent above the ECB rate, so 2 per cent interest per year. Deposit rates for medium-sized sums are higher than that, which is why the banks have to charge higher interest rates on all other loans just to try to claw back some of the money they are losing on trackers.”

    As I pointed out above, this statement is incorrect.
    There is no matching of deposits and loans , it is a lie.
    With 10% reserves and a 100,000 deposit the bank can lend out a minimum of 900,000.
    It probably has been lending at 2-5% ratios which means the loans on 100,000 deposit could be as high as 3.3 million.
    Charging 2% on 3.3million = 66,666 Euros == 66% on the 100,000 deposit they pay out a mere 5000 on,so the return on the deposit could be 61%
    That is how the banks leverage a massive fortune and when things go wrong as they have their losses are huge which is where we are today.

    Then they want the taxpayer to cover the leveraged losses. Part of this is the extra charges to recover their reserve. Mostly just dump it on the national debt.

    Imagine what happens if just 20% of those mortgage do not perform. Say they are revalued to a 50% loss. Then 10% of the portfolio is gone. so the banks are underwater by 3-4 times the original 100,000 loan.

    Now imagine those loans had been securitised and sold and the money reinvested in new loans but the bank still guaruantees the interest rates. now we double the losses. how many times have home owners refinance their homes to live the good life. 4 times is not uncommon. Banks may have done the same now the losses are 4 times which in total 12-15 times the original deposit.


    So this is what needs fixing. all else is window dressing. It is why QE to infinity will fail. The current system is broken.–world wide!!!

    We must close the central banks
    Repudiate the odious debt.
    Ban fractional reserve banking
    Go to a solid honest money, commodity based money system.

    Do you still think I am mad, and you can scream fuck gold.It is the only money system that will restore sanity.
    Of course the political system and the current crop of politicians must be swept clean away to effect such a change. There are several working, who subscibe to this blog, and others, trying to do just that.

    But the objective must be clear and communicated and then it will happen.

    • Tony Brogan

      Excuse me but this is total insanity

      If it isn’t, we need to go back to Frankfurt and come up with a figure that covers all bases and say to the ECB: “We need more cash and you will have to cough up.”

      This money will be produced from thin air and added to the national debts of all participating countries in the ESM. And remember there is no upper limit and the national sovereigns can not even demur. The bankers have every member by the short and curlies.

    • Grey Fox

      Yes Yes Yes and Yes

    • Jesus Tony,

      Give me a break, I can’t be over everything:) But re odious debt. If you put the term into the search on the site, you will find that I was proabably the first commentator to mention it and describe bank debt as such, way back in 2009.



      • Tony Brogan

        1.. Just yanking your chain a little David,
        Thanks for noticing
        Odious debt has to go. Well done. One down and only Three to go. how about #2 now when you have a few minutes.

        2.. Now how about the central banking system of debt based money v. Treasury issued non debt, not added to the national debt, direct issuance of money system.

        3.. how about the fractional reserve system of banking being banned in favout of 100% reserve banking.

        4… How about a sound money issued parallel to the fiat system. That is silver coin monetized to a value that can not fall but can rise with the inflation of the underlying silver content, the intrinsic value of silver. Give the people a choice.


  23. Clare Leonard

    I am working hard to change things,

    I am very aware of the financial situation globally and in Ireland .

    We are in a failed global monetary system.

    The debt based monetary system is finished,

    the system is crumbling..

    Early in 2010 I wrote a paper to the government suggesting

    the introduction of a parallel currency of Gold and Silver,

    which if implemented I believe could/can save the Irish people

    from financial disaster, as the purchasing power of fiat money collapses.

    Inflation is the expansion of the money supply.

    All fiat currencies are deflating at a scale so fast our earning ability cannot keep pace.

    Our money-printing central banks and their cheerleaders understand the full

    consequences of the monetary debasement they continue to engineer.

    Now central banks scramble to borrow, steal, and buy as much gold they can,

    because they fully understand the consequences of their monetary policies.


    For 6,000 years Gold and Silver have been the last man

    standing when currencies are debased and destroyed.

    While central banks fully understand the consequences of their monetary policies.

    I do not think people truly grasp the horror of the destruction that will/is

    taking place, in terms, of the loss of purchasing power in the various fiat paper

    currencies, as the printing presses are really heated up.

    Hyperinflation is the inevitable outcome( which is a political event.).

    In 2010 the total pension fund was 21 billion,

    if the government had implemented my suggestion,

    the pension fund would now be worth in the region of 36 billion.

    We had 47 billion reserves at that time, which the government gave to the banks.

    This would now be worth in the region of 64 billion.

    The gov. choose to give the banks 16 billion of the 21 billion pension fund

    and as a result only 5 billion was left.

    We are, for a second time, facing another FAR MORE serious global financial collapse,

    the government seem blissfully unaware and certainly appear to be unwilling/ incapable

    of giving any honest direction to the people of Ireland. We are left to scramble as best we can to survive.

    Irish people deserve to be told the truth so that we can prepare and protect our families and communities.


    We could/should have 110 billion, and a hope of further growth,

    instead we are left with 5 billion and an Odious debt we cannot and should not pay.

    Direct Democracy Ireland believe the agreement to socialise bank debts was reached

    under duress and coercion, and as such the agreement has no legal standing.

    In international law Odious debt is a legal theory that hold,

    a debt incurred by an administration for purposes that do not serve the best interests of the people,

    can under law be regarded as Odious.

    Under Odious debt law the actions of the ECB and the Irish central bank could well

    be considered “crimes of aggression” against the people of Ireland.

    We believe the Irish people are under no obligation in law to pay

    this Odious debt.

    WITH THE SUPPORT OF THE IRISH PEOPLE. Direct Democracy Ireland intend to

    suspend all interest and capital repayments, pending an international legal review.

    Rather than being powerless, we hold the fundamental building blocks of power

    under our constitution. We can change any law we wish to change.

    We are a sovereign people.

    Do not forget, Irish people and our land are REAL gold.


    Clare Leonard

    Financial spokesperson

    Direct Democracy Ireland.

    • Grey Fox

      As clear and unambiguous as it gets Clare, well said!

    • Tony Brogan

      Good one

    • breltub

      I agree with almost everything except “Irish people deserve to be told the truth”

      You get what you deserve. The Irish electorate has been voting in lying, corrupt, gombeen twats for years and now it is wondering why the politicians are acting like they are!

      Last election I voted independent, can’t remember who but things won’t change until we get politicians out of our lives as much as possible!

      Best of luck getting you party going. It is badly needed

  24. Grey Fox

    I reiterate what Tony Brogan asks:
    Where is David McWilliams on the issue of odious debt?
    What is his position on fractional reserve banking? dead silence here.
    What is his position on central bank debt based financing versus debt free currency from Treasury?

    • Tony Brogan

      We have the answer, sort of on odious debt.
      No answer yet on FR Banking
      No answer on Central bank debt based f]money issuance.
      No answer on the issue of sound money as a choice.

      We will get to the stage where no answer will tell us all we need to know!!But he must be a busy man at the minute.

      enjoy the day

  25. Adam Byrne

    Tony, you’ll be surprised how big Langtons is inside, absolutely gigantic, although it looks small from the front.

  26. Philip

    Absolutely brilliant comments this week. Meat in every one of them. Better than the article actually.

    This ticking time bomb is that of Status Quo self destruction. We need to recognise that a lot of Ireland is living with its head in the sand. And I find I am one of them a lot of the time. We are a very wasteful and divided nation FULL STOP. The majority of current effort is focused on ensuring everything is stays the way it was for the 10 years before 2007.

    We throw away wealth simply because we value little beyond the superficial baubles of a flash car and a D4 lifestyle. I hear 20K a head for debt…that would not but half of a typical car I saw motoring around during the boom years. Just take a walk around Stuttgart where they make Porsche and Merc and the majority of the cars on the road are 6-8 years old and well kept. And so on and so on…yes the Irish need to cop on.

    We have immense waste in this country. I’ll give a few everyday examples…Mowing grass and paying money to bin brown waste and trimming hedges along 1000s of kms of hedgerows with tractor flailing mowers – all that energy expended and no attempt to pick up the debris for recycling or energy reuse – ah shure…what’d be da point? That up to the Germans to dream up a solution and shure if I started tinking like that, da local council will be charging me thro’ da nose.

    Yes, the banks have not exactly helped, but a lot of problems lie between the ears of the majority of us. What this article fails to highlight is that if we got relief, I am convinced the old ways would come back and we’d be buying property and blinging like there was no tomorrow.

    I believe it takes a good 5-8 years to break old habits. We are about 4 years into this crisis. I’d say that any sudden improvement in financial terms within the next 2-3 years would not be very helpful at all. The people of this nation of ours have proven to be very worthy contributors in other countries at all levels. Time to allow conditions for similar to happen here.

    While our author correctly diagnosed the problems created by excessive credit, the solution will NOT be in repairing the financial industry – in fact the latter is irrelevant. It will be solely from the people themselves after realise they need to rescue themselves (which means voting correctly and supporting local businesses and starting it and stop relying on FDI and dismantling useless councils) and finance will follow quickly afterwards.

  27. Pat Flannery

    McWilliams writes as if mortgage securitization does not exist when it is the well-spring of all our current economic problems.

    The fact is that mortgage securitization, disguised as sovereign debt, is holding Europe to ransom using Ireland as a financially-wired suicide bomber. The mortgage security bondholders, who have taken over not only the banks but the central banks as well, have gotten their way so far by threatening to detonate Ireland if the EU leaders do not surrender to their demands.

    McW and other central-bank-trained “advisors” like Dr. Alan Ahearne (former economics advisor to Brian Lenehan) are urging governments to placate the mortgage bondholders with a debt-for-equity deal, like Neville Chamberlain’s “peace for our time”. And we all know how that deal worked out.

    I feel like Churchill urging Europeans to confront the evil of mortgage securitization before it is too late.

    • redriversix

      While Micheal Noonan is promoting “peace in our time”…….like P.M Chamberlain.!!


      • Pat Flannery


        Study all you can about how the Irish banks securitized their mortgage lending and passed it off as bank lending. Demand that the Irish commentariat deal with the real issue.

        Don’t be misled by people like McW who keeps you all chasing mice while the elephant in the living room, securitization, goes unnoticed. Don’t forget he comes from a central bank background with a central bank bias.

    • StephenKenny

      I can’t remember it being put so clearly and accurately.

    • Tony Brogan

      Sad but true Pat

      • Pat Flannery

        Hi Tony,

        What would be sad is if we all went for it. To quote another eminent soothsayer, Deep Throat, follow the securitization.

        • Tony Brogan

          Well I understand but few others do. One can write and explain and it passes without comment.
          The practice of securitization and the roll over of the cash so many times makes the reserve factor meaningless. The leverage is so great that a 10% write off of the mortgage portfolio bankrupts every bank in the world and as these losses are socialized to the public purse they bankrupt the people of earth.
          Now we have physical deflationary depression with hyperinflationary monetary policies.
          The worst of all worlds
          A hyperinflationary depression.

          It could be avoided if the banks were allowed to fail.
          and etc. My little chant to follow!!

          • Pat Flannery

            Hi Tony,

            Securitization avoids the fractional reserve rules of central banks. That is why it was invented. The mortgage loans it produces are disguised as bank portfolio loans.

            People believe that because their mortgage was originated by their bank that banking fractional reserve rules apply. McW is one of the foremost propagators of that untruth. He has you and others on this blog focused on fractional reserve banking and all its flaws, instead of looking at the real problem: securitization.

            The truth is that if all the banks in the world failed securitization would still be there like “the dreary steeples of Fermanagh and Tyrone” after WWI, to use another Churchillian analogy.

          • Tony Brogan

            You really know how to make an antagonist out of a friend.

            “He has you and others on this blog focused on fractional reserve banking and all its flaws”

            Lumping me in with your general comment demonstrates what I said before. You have read nothing of what I have written in the past. I have explained the results of MBS’s several times to absolutely no response. Since the demise of Bear Stearns.

            The truth of the matter is that DMW has not even got as far as fractional reserve banking, and most people do not understand it exists.

            There is nothing wrong with secuitization per se.
            The problem with it is that it appears to not be an outright sale but that the bank is still liable for the performance of the loans. It as has been explained gives huge profits in a rising economic trend and a huge loss in a deflation.

            Then of course are all the derivitive contracts that are just pure bets with counter parties and counter, counter parties ad nauseum. A financial inverted pyramid ponzi scheme imploding.

            Some countries have no legislation for fractional reserve and leave it to the adjudication of the central bank.

            anyway I would rather you piggybacked some good ideas with suggestions of your own so we develope a mutual growth and progess in understanding. At present you denegrate other efforts and those are to defer to your superior position.

            Like you I spent 40 year plus in North American and over 30 with a realestate business. I am or was licensed for Property Sales, Mortgage brokerage, and Property Management. My courses were extensive in the various aspects of law, mathmatics of finance, and relevent statue law in BC

            you I believe were in the mortgage brokerage business.
            As I am sure you know, the securitieswere sliced and diced and repackaged. This gives rise to identfying the owner of record of the mortgage and a problem being able to foreclose. Has the US law been changed anywhere there

    • Philip

      Suppose I bought a Garden Gnome for 1 million euros and the bank lended money because for some “reason” they figured gnoming was a great business to be in. Who is at fault here?

      And suppose I buy a few expensive holidays and cars and yachts on the basis of the securitized assets (of 30 other gnomes I found in me attic a year later), who is at fault here?

      And if the banks decide to borrow to get into gnoming big time to also inflate the sheets for foreign lenders…then what?

      I’ll tell ya who is at fault.

      The subsequent idiots who bought a gnome. They are also the ones who get burned. As for banks etc. Repairing them makes Gnoming possible again. As for the markets? Well as long as gnomes are touted as a good buy, we are destined for another episode of being gnomed.

      You see, we all like to blame someone else for our “own” decisions and we all want gnomes to be back so we can all feel good. But no. It’s fairies now.

      This is the fundamental problem I have with blaming banks and crappy currencies and dodgy monetary policies for all this. In a democracy we get to choose our touters of gnomes and fairies and whatever and in an effort to re-stimulate growth. But the real civilisation of having to honour your promises tends to be overlooked and the idea of just saying people in the main a stupid and get everything they deserve not good for the blog and media stats (except when you get that heated “how dare you” reaction.

      As for gold and currency and all that palaver – sure..clearly you were one to by gnomes early one and all you are doing is hedging until the fairies come. But mark my words, any time anyone is a leader telling u to follow them – all that is happening is you are filling their pockets.

      Honesty with one self. That is where is starts. The rest is nonsense.

  28. gizzy

    It is amazing that some of the commentators on here raise major issues with debt relief as a realistic measure to deal with the mortgage problem. The two major issues seem to be morale hazard and potential property bubbles oh and the third one and the best that the lazy football watching drinking paddies get to keep their homes when they brought the whole thing onto themselevs by buying homes that the governemnt and banks advised them to buy. What gobshites they were for not noticing the oncoming US homeloan timebomb, securitisation,packaging as AAA bonds rubberstamping by credit aegencies folloewd by the worst liquidity crisis in history. Then they were so lazy they did not stop one of the worst banking and economin decisions in history the blanket guarantee. They were also too consumed with Man United to stop Trichet forcing Lenihan to pay bondholders,

    Morale hazard good one I did not and do not agree with lazy depositors being bailed out while I pumped lots of money into trading businesses and employing others. They just stuck their money in failed banks and voila bailout and no morale hazard because sure aren’t savers the fine upstanding teetotal non football watching pillars of society.

    Ptential property bubble is so far down on the list of potential economic threats to this economy as to self insult those who have raised it as an issue against a course of action. It is like telling a cancer patient not to get out of bed in case he pulls his hamstring.

    I am not sure which is more annoying the pulpit preaching attitude or the inability to look at a range of options that not only deal with an unprecedented economic situation but more importantly the social consequences.

    Oh and by the way I have paid over 1.5 million in various taxes in this country, I have never drawn a penny from the state, am self educated not the stereotyped drunken paddy that eireannach fester and others think are to blame for the mess we are in. Do you think the 340,000 who lost their jobs in the last two years lost them because they had too many beers watching Man United.Get over yourselves.

    • Harper66

      when ever I read posts such as the ones you mentioned I am always reminded of the first few minutes of the following scene –


    • Eireannach


      When you have an expanding ecology, you have organism competing to capture energy and resources and an accelerating rate.

      When you have an contracting ecology, organisms compete in a game of musical chairs, as energy, resources and populations contract.

      Those in Ireland who want to see a write-down of mortgage debt simply want to save themselves. They don’t want to lose their homes. They don’t want to lose, to fail.

      They feel that since they faithfully followed the ‘advice’ of government, realtors, banks and so on, they are not at fault and should be compensated.

      The strongest force will win – either the combined power of debt write-down advocates or the combined power of the creditors who don’t want to lose either.

      It’s a power struggle – nobody is right or wrong in ecology.

    • Eireannach

      Another rule from ecology is ‘you snooze, you lose’.

      The Irish are snoozers! Obsessed with Alex Ferguson’s latest signing, the price of a pint, the latest hot topic on Ryan Tubridy’s chit-chat show, and other mediocre rubbish.

      There is a reason we are falling behind on every single index of competitiveness, and if you don’t like these harsh words, it’s not surprising is it because the truth hurts!

      • gizzy

        How can you explain so many snoozers being so successful overseas.

        No one feels they should be unfairly compensated but there should be a level playing field. Depositors and Banks were bailed out not borrowers and the country is in shit. But don’t let the facts get in the way of a generalised rant.

        • Adam Byrne

          Simple, a lot of the best people left to get away from the gombeenery and sleeven slipmickery.

          • gizzy


            There are a lot of good people left here who want to make it better. Using words like gombeenery and slipmickery what does that mean. I did emigrate once. Do I have to do it again at nearly fifty with two young kids to show I am one of the best people. A good starting point could be having a little bit more pride in the Irish. Of course we have faults and our politicians are poor. But look at other countries and see the messes they have caused in their history.They all have bad politicians and corruption whether they call it sleeven slipmickery or just nepotism, patronage or corruption.

          • Adam Byrne

            Fair enough gizzy. No offence meant to you. I’m not into that so I apologize. I’m sure you are a hard worker etc.

            However, if I may express an opinion, you might have been better off staying overseas as what goes on here is shocking and worse than what I’ve seen in any other country I have lived in so far (Ireland + 7 others). Even tonight on Vincent Browne, discussing the pay and pensions of daylight robbers like Eamon Gilmore – he’s paid higher than David Cameron??!! – would make you sick.

            Also, forget the pride. Wake up, sober up and get real, maybe then there can be some pride – until then no – look what happened the last time – thankfully I wasn’t here. But even when I was overseas I never behaved like that. Poor Rasta family and friends in the Caribbean taught me humility, my words here notwithstanding.

            Yes, crooks everywhere, but particularly bad here. I’m not doing anything about it – I can’t – can you?

            Take it easy gizzy.

        • Eireannach

          Look Gizzy, don’t get personal. It’s a power struggle between debtors and creditors. The debtors aren’t good guys in white cowboy hats, and the creditors aren’t bad outlaws in black hats. The truth, of course, is in the ‘grey’ area in between.

          • gizzy

            Didn’t think my comments could be construed as having such a simplistic knowledge of economic and banking isues to think of it in terms of cowboys and outlaws. Life is a grey area only made whiter by doing the morally right thing.

            Can you not make your comments without the constant insulting of the Irish. It’s wrong and not factually correct and I do take it personally. I am open to all views but not insults.

          • Eireannach

            What’s this they say pride comes before?

  29. Tony Brogan

    The country isn’t “divided” – as mainstream media talking heads like to say – but pissed off. Genuine and legitimate frustration permeates the land from sea to shining sea, and rightly so. Ever since the banker coup of 2008, crony capitalism has been institutionalized as the only real way to make money.

    -Mike Krieger

    It’s not only Germany (who’s gold is missing), it’s the United Sates, it’s all of the countries.


    The 99% blame the 1%, the 1% blame the 47%, the private sector blames the public sector, the public sector returns the sentiment … the young blame the old, everyone blame the rich … yet few question the ideas behind government or central banks.

    -Dylan Grice

    US hourly earnings are down, in real terms, against gold they are down 90% since 1971, and down 81% since 2001.

    -Egon von Greyerz

  30. michaelcoughlan


    When I read this in the SBP what really struck me was something neither written in the article nor left out of it. What really struck me David was the picture of you and the striking contrast between the new picture and the other photograph of you which shows a smiling younger happier person without a care in the world.

    The new picture shows an older, paler, much more sombre and circumspect individual who looks like he has had a premonition of something bad to come and his wracked by the torment of not being taken seriously by the careerists in the banks, government and civil service. The reason you look the way you do in the photograph is proof positive in my view of how sincerely you care about what happens to our great Republic and it’s people. Contrast that with the photograph of Beranke a number of weeks ago which shows a smiling, tanned, relaxed and un-pertubed individual who is in control of a hopelessly bankrupt country fighting one unwinable war after another with millions of its citzens unemployed etc. etc. It’s worth remembering the point I made at that time which is that you can only look that good when you truly don’t give a shit. Your photograph in my view is proof positive of that point.

    Could I respectfully suggest that when you make an argument for debt relief that you present your arguments in a way that preserving the euro is also possible because otherwise Mrs Merkle isn’t going to give a rats ass so neither will the people in the Dail. If your arguments will facilitate the preservation of the euro they will have substance and merit in the world of real politick. Otherwise articles of this nature will be simply dismissed as populist.

    best regards,


    • Tony Brogan

      Hi Michael

      IMO the only way to get debt relief as a country is to repudiate the odious debt dumped on the taxpayer. Then there is no need to borrow from the central bank. If Ireland decided to do such what could be done by anyone to prevent it.

      The only way for it to happen is for the people to demand it. Ballyrea says no needs 100,000 people and you will see immediate action.

      Best regards

    • Hi Michael,

      I am just getting older:) But as for not being taken seriously by the careerists, I suppose I started out as one of them in the economics department of the central bank thats what a good”masters” drgree was supposed to deliver. Then I moved to a few international banks before finding something I really liked doing as was really important, maybe that’s why they are so circumspect because they know they too could have got out but they chose to rot inside!!



  31. Grey Fox

    A little comment from inside the lions cage, it seems fear is leaking from the overfilled trough that is the financial sector….

    From Money Morning:

    A debased currency leads to social upheaval

    The idea that central bankers could destroy the world might seem a little strong. But they can certainly do a lot of damage to our social fabric.

    In recent decades, as central banks have slashed interest rates and blown bubbles, we’ve lived through what Dylan Grice of Société Générale describes as a “credit hyperinflation” — possibly the “largest credit inflation in financial history”. While this inflation may not have shown up in consumer prices (so far), it has certainly shown up in asset prices.

    Who benefits from rising asset prices? The people who have the most assets — the wealthy. This in turn has driven up wealth inequality to historic levels. Record numbers of Americans are receiving food stamps, for example. Yet, as Grice notes, “the top 1% of income earners are taking a larger share of total income than since the peak of the 1920s credit inflation”.

    This is a recipe for social turmoil. And central banks are aiding and abetting it by actively trying to encourage more inflation. They seem to believe that inflation can be controlled before it gets ‘out of hand’. The hope is that the likes of Mervyn King and Ben Bernanke, and whoever takes over from them, can conjure up “just enough” inflation to make our debts go away painlessly, without ruining everyone in the process.

    But central banks and mainstream economists don’t have a great track record on these things. They didn’t see the credit crunch coming. That suggests that they have no real idea of why it happened in the first place.

    So why should we imagine that their solutions will work any better? Why believe that they can somehow work out how to unleash inflation, then put it back in its box at exactly the right moment? That’s not a leap of faith I’m prepared to take.

    As Grice points out, inflation is very socially corrosive. At heart, “economic activity is no more than an exchange between strangers. It depends, therefore, on a degree of trust between strangers”. So if people can no longer trust the value of money — the medium of exchange — how can they trust one another?

    As a result, he fears that we could see “a Great Disorder” as inflation takes hold and people once again start to worry about the value of the pounds in their pockets.

    That’s why he’s still very bullish on what he describes as “safe havens”. We’re not talking about government bonds here — they’d be hammered by inflation. Grice likes gold, which should do well if inflation runs out of control.

  32. Grey Fox

    Central bankers have already destroyed the world!

    • Tony Brogan

      I think you are correct there.

      The smart countries are scrambling to get their gold stock increased and yhe less smart scrambling to see ifthey actually have what the thought and the dim are still selling and leasing.
      not for long as the demand exceeds the physical supply. those holding paper will find it an empty shopping bag.

  33. Pat Flannery

    Advising people to buy gold and silver is like advisng kids the ’50s to hide under the table in a nuclear explosion.

    • Tony Brogan

      and what do you suggest in lieu?

      • Pat Flannery

        Demand the truth, not a placebo.

        • Tony Brogan

          And what is the truth in regard to buying gold and silver? Is it not proven protection over the ages for the very conditions we are facing? Has it not been the best thing to own over the last 12 years and it looks as if the trend is continuing?

          If not gold and silver, what?

        • StephenKenny

          In reference to your previous disagreement, both suggestions have merit, clearly, but without oversight and enforcement they are both meaningless. I suggest you reacquaint yourselves with Prof Bill Black’s arguments, including his book “The Best Way to Rob a Bank is to Own One”.

          On this more recent one, buying precious metals is an action an individual can take, whereas supplying the truth is an action that someone else has to take. Without the truth, a market economy cannot work, and without a sound currency, a market economy can’t work. Without the political will (broadly, enforcement), neither can ever be verified, however they are represented.

          Quite soon, you two are going to run out of things to argue about.

          • Pat Flannery

            I don’t come here to argue. But I am not going to drink the McW coolaid either. Please speak to the points I make and deal with them in a non-personal way, as they are intended.

          • Tony Brogan

            Quite soon, you two are going to run out of things to argue about.

            I sincerely hope so

          • Pat Flannery

            We already have.

            From now on I will simply post a response to McW’s articles, whenever I fear he may be misleading people. I hope you will therefore understand if I do not respond to comments by any of his readers. As I said, I did not come here to argue with his readers.



          • StephenKenny

            I already have. In my view, your comments :

            “Demand the truth, not a placebo.” and “Advising people to buy gold and silver is like advisng kids the ’50s to hide under the table in a nuclear explosion.”

            although quite accurate, are, in terms of the financial system, saying little, if anything, more, or really anything different, to those that Tony Brogan makes.

            Buying gold is an action that is in itself a statement of a belief that truth is the key necessity. For thousands of years gold is the only truth in terms of value, be it trade, a day’s work, or a day’s work 20 years ago.
            In the modern economy, gold without truth (see JP Morgan’s gold trading, as an example of gold without truth) is worse than meaningless, it is misleading.

            The 50′s children hiding under the table is, contrary to the hilarity of some sectors, the best immediate action anyone can take in those situations. It won’t save anyone from a direct strike, which seems to have been the obsession of many, but it will minimize the affect of the initial flash, and then of the blast – of course assuming that the whole building isn’t blown away. If upwind, survival of the first two will probably mean survival.

            So again, it is very like Tony Brogan’s recommendations to buy gold. Gold won’t save you if there’s a direct strike – if all of civilisation collapses – but it will enable financial survival of the severe financial dislocation that will occur, and of the scarcity during following ‘rebuilding’ stage.

        • redriversix

          could people handle the truth,,? I don’t think so..in fact from experience..I believe they can’t..!

          • Hi Pat

            Again welcome to the site, always nice to hear your views. My central arguement is that when debts go bad they are not paid. This is called “co-responsibility” where banks and borrower pay, its the basis of all bankruptcies, chapter 11 what ever you want to call it.

            All the best


          • Pat Flannery

            Hi David,

            Thanks for the polite reply. I hope you will accept my response in like manner as it is so intended.

            Chapter 11 bankruptcy in the U.S. is a Court-approved reorganization plan imposed on all creditors on behalf of a debtor/petitioner while the Court puts a “mantle of protection” around the debtor.

            Chapter 7 is a court-imposed full liquidation of all the petitioner’s assets, with a few Court-decided reservations, the sale proceeds of which is distributed pro-rata among the listed creditors who filed a verified and timely claim with the Court.

            Your debt-for-equity suggestion is a long way removed from either Chapter of U.S. bankruptcy law. There is no write-down or forgiveness of debt, no “fresh start”.

            The U.S. bankruptcy system is based upon this concept of a “fresh start”. In passing the Law the U.S. Congress meant to ensure that no U.S. citizen would ever be rendered unproductive to society by becoming an indentured servant of any creditor. It thus determined that lending must always have some risk.

            Apart from your wrong analogy with U.S. bankruptcy law, my impression of your debt-for-equity suggestion is that it comes out of a banking/central-banking mind-set. Bankers think in terms of balance sheets, assets and liabilities.

            Your suggestion “balances” the banks’ books by creating a worthless asset on the banks’ balance sheets. There is no equity, or ever likely to be, in any of these bubble-priced homes – unless of course you are predicting another even bigger housing bubble.

            Your suggestion does exactly the opposite to what the U.S. Congress intended, it locks a citizen into a permanent position of debt. In short your suggestion betrays that you are not “out” of the banking world. Whether consciously or unconsciously, because of your training, you are still batting for the banker, not for the consumer.



  34. Tony Brogan


    Germany’s gold is long gone. Worse than I expected. I thought little was there and the 50 tonne a year repatyriation was to allow it to be spread out over enough time to accumulate gold that could be sent to Germany.

    Any disclosure that the gold is gone and the price goes poof to double and then some. The monetary system would go poof too.

    We are close to that point. I repeat from last week…
    Get your gold now while there is still some to be had.

    Bullion in hand is the only way. Silver is better

  35. Tony Brogan

    From Jim Sinclair on fixing the world economy


    I have followed you since your newsletter in the 1970s. I am puzzled by your response to Bill where you talk about the dire results of stopping the fiat money printing.

    Since the results of stopping are bad you are implying that continuing the fiat until ultimate failure with runaway inflation is better.

    Is that what you mean to say?

    Thanks for all you do for us,
    CIGA Jim

    Dear CIGA Jim,

    My job is to tell it like it is.

    The economy is a drug addict. The creation of money is history making in a modern economy and money creation acts exactly like a drug. Like a drug the more you take, the more you need. The more money you create, the more money you must continue to create until it goes to infinity. You go cold turkey on money creation, you unleash the economic wrath of hell in the entire Western world. It all comes down in one great implosion.

    Russia and China would act immediately economically to take full and powerful advantage of your error in application. You have to wean a drug addict off the drug in order to not kill him in recovery.

    We need a new monetary system complete with a strategic plan of transitions from here and now to there. There is no politician out there that will do this no matter what is promised before the election. That will not change in November.

    I was short listed in the Nixon Administration for Secretary of the US Treasury. A major article in the New York Times listed me as someone in consideration. I have a plaque from my membership on the Senatorial Economic Advisory Board. If I was in office, I would have done everything to prevent this, regardless of the cost personally

    If I was made Chairman of the Federal Reserve in January 2013, I would wean the system slowly down while working to recreate the monetary system with required total gold value for government treasuries tied to a world index of total Western World M3. That is a simplification, but it would be the heart of my plan.

    Jim, I know this stuff. I am not retreating from conservative principles. I just know that the mishandling of any situation due to dogmatic beliefs can set off a nuclear explosion. I would walk the Western World Financial System back to sobriety, not try to blast it back which would fail miserably.

    I could do it.


  36. Clare Leonard

    When are we going to stand up and be counted
    and say enough is enough,
    when are you going to leave your computer screens. Do you a legal background?,
    when are you going to help those who do not have
    the skills, yet they try day in and day out
    to help people to stay in their homes.
    During the famine neighbours benefited from their neighbours misfortune, when they bought their land at
    very low prices when people died or fled the country.
    Is this what has become of us again.
    Can we lift the black gloom of despair hanging over this wonderful country. How much more stress can young people take. You fight about whether a person
    should get some debt forgivness, you forget that the
    government took over 45% of the total purchase price of homes sold in the last few years.
    If you bought you home 10/15 years ago, you did not
    have to suffer that level of tax payment.
    People purchased in good faith trying to put a roof over their head, because that is what responsible parents do.
    The government ripped them off with a 45% tax.
    Frankly, I do not care how the government do it.
    Just give people a tax rebate, then get our 64 billion you put into the banks back. The banks can go to hell or the wall.

    Another of my young neighbours was found dead today.

    Please stop bickering and just love and help your neighbour. Leave the judging to God.

  37. imithe

    Sad to see the contrasting comments between this article and the last one which provided lots of hope.

    It’s also disturbing to hear about people taking their own lives through hopelessness.

    I remember having fears for the future when I started working in the mid nineties. All I can offer as advice is to believe in yourself, try your best and the future will be better.

  38. Grey Fox

    The following is a review and downgrade of Celtic Residential Irish Mortgage Securitisation No. 16 Ltd which closed to the speculative markets in April 2010, What! I hear you say… yes April 2010!

    Even in the middle of the greatest economic disaster, caused by the Banks, it was business as usual as late as April 2010 for Ulster Bank the originator of the above mentioned securitisation tranche.

    The value of this tranche was €1.054 Billion and it was backed by Irish Residential Mortgages which originated in Ulster Bank’s now absorbed subsidary First Active PLC, remember them….?

    I will post the link to the full report from Standard & Poor’s (ironic name that!) Ratings Agency at the bottom of this post, but, I would like to summerise a couple of points.

    1. This securitisation tranche has undergone some restructuring and appears to have had some distressed mortgages repurchased from the mortgage pool by Ulster Bank.

    This may well pose a difficulty for Mortgagor’s and particularly Mortgagor’s in distress or foreclosure, who are attempting to ascertain if their mortgage has been subject to securitisation, if the mortgage is back in the hands of Ulster Bank it makes the job of lying to the Mortgagor easier.

    2. ” Due to current forebearance measures and the legal uncertainty regarding the foreclosure process, repossessions have generally been limited in the Irish Residential Market”, this statement is important as it confirms the fears in Financial circles about the ability to complete legal repossession and may also indicate fears that ultimately repossessions are going to become more and more difficult to complete in the Irish Market. It certainly confirms that the full extent of possible repossession’s in Ireland have not been publicly acknowledged by either the Bank’s or the Government.

    3. The level of severe arrears in this tranche has been increasing steadily, currently, 17.5% of all the Mortgages in this tranche are 90+ days in arrears, and, a massive 92% of all the Mortgages in this tranche are in negative equity.

    30% of all the loans in this tranche have already undergone some form of forebearance.

    4. Standard & Poor does not expect that any of the mortgages, 90+ days in arrears will return to “current” status, they also state that the probability of foreclosure will become more likely as the economic environment deteriorates. We now know how Standard & Poor view the Irish Economy overall, note that they state ” as the economic environment deteriorates” and not “if”.


  39. Philip

    We are fixing the wrong problem. Central banks and monetary systems will ONLY break the world if people remain attached to the idea of savings = wealth rather than rather than “ability to do” = wealth.

    Money, fiat or otherwise is merely a communications system to allow trust for any transaction. Having it without “work” is robbery.

    Right now, the ONLY reason there is a crisis is the imbalance between nations in “ability to do” which is being further exacerbated by former beliefs that “savings” = wealth. This belief goes to the heart of our institutions and stops people from working. As long as this belief is upheld we are in deep trouble.

    Gold is the trust of last resort – but here’s the rub; you need to be looking at it. Buying it via any indirect mechanism via a broker etc only lines you up for a major skinning as the pressure comes on. Remember the only reason Gold was used was it was not easy to counterfeit and was centrally controlled. If you had a mine of the stuff…lucky you. As soon as the Gold exchange system becomes compromised (as I think it must inevitably), you better be looking at it and have a very secret place. Try exchanging it for servcie should be fun.

    The only reason we have a crisis is belief in a myth of savings over ability to do work. That is all.

    • molly

      All this talk about buying gold as some sort of a saviour is baffling .
      1 you can’t eat gold.
      2 there’s no secure way to hord gold unless you have a private army to protect you and it.
      I believe if the system as we know it goes under,land will be the thing to have as food is key to survive when things go under.
      It’s amazing how us humans can survive once we have food.

      • Adam Byrne

        Dead right Molly. Weak people and their gold will soon be parted if it all goes pear shaped.

        • Tony Brogan

          The original term , Adam, is
          “A fool and his money is soon parted”

          Coined in thedays when silver and gold were money in circulation.

          Land is good molly but you can’t eat it either!!
          You save gold and silver and protect it like anything else you have. It is the only money that will protect you from inflation
          As a national currency it prevents government overspending, it makes fractional reserve banking very difficult. It is termed honest money for a reason, it keeps politicians honest :).

          • Philip

            Tony, you cannot live as though there is just one country where all play by the same rules. Yes…in such a situation gold or indeed any tightly controlled issuance of a form or legal tender does work.

            Gold is only an accidental and naturally long lasting and limited portable resource. For your system to work it has to be physically in your possession – to protect same will incur charges and in turn cause big government or big mafia…take your pick. Next you’ll be buying protection and it’s the wild wild west.

            Maybe the real reason why big government becomes what it is there are other BIG governments who’ll move in on your territory. Maybe the reason why we have booms and busts is because of disruptive change due to war, societal and tech change. Money was never the cause of it – it merely follows cycles and accelerates the arrival of the end game.

            I like booms. I want more booms. The busts need engineering out. Gold is not the answer and it never serves a boom. It holds everyone back forever.

            Gold of itself – only strongest can retain it as push comes to shove.

          • molly

            No you can’t eat land you grow food on it and you can live off the land,all this talk about buying gold and silver it’s like going back to the Wild West ,in mad max it was petrol,
            If things go so bad and you could not travel for fear of being attacked and robbed or killed,where would gold be then.

          • Tony Brogan

            Hi Philip
            Switerland kept a strong currency yet remained competative and it was beacause everyone knew the currency was backed by gold.

            Gold can be deposited into a bank. The bank charge an admin fee. The depositor uses a debit card and the gold id deducted from the account in grams or as little as 1/1000 of a gram.

            Modern convenience.
            The gold is still yours and the bank act as a custodian there fore can not use it for fractional reserve banking and multiply the money in circulation.

            The fastes and most stable advances were made under the classical standard of the UK from 1870-1912.No inflation and the population was all enriched. Many of the inventions we use today were developed them.

            The booms are mostly caused by an expansion in the money supply which is all loaned into the economy as interest bearing debt. It has proven unsustainable. It also creates inflation that enriches the doner of the money destroys the middle class and empoverishes the working poor.It then deflates and collapses.

            A gold standard provides sustainable development.

            Any way Philip I’ll meet you one of these days and raise a jug to your health, three square meals a day, a warm abode, and some pleasant company.May we all be so blessed.

          • Tony Brogan

            Hi Molly
            Yes that is what you do with land. to buy some needs money. the fastes way to save is with gold and silver and use it to buy land.
            but if things get so bad then maybe you would have to leave the land, It can’t be carried but gold can . So there is the rub.

          • molly

            Good man I like you,we need you people like your good self .

          • Tony Brogan

            Thank you Molly
            We will raise a jug together sometime
            good luck to you.

  40. Tony Brogan

    I have been meaning for the longest time to see If I could put up a blog. The link below should take you to my first effort which is a propasal to monetize a Canadian silver Maple Leaf coin
    The process is easily adaptable to any currency or country. I hope it works and send me a comment if you wish


  41. Tony Brogan

    Adam and the Kilkenny crew.

    I have signed up to attend 11 shows. 1 down and10 to go.
    I noticed Sat night had one I wanted to attend. 9.45 pm is “Wrestling the economy back from the banks”.
    So I will be at the Langtons pub at about 8.45 to 9.15 and then return at 11.15. I have a Festival Club ticket for Sat night as well which is held at Langtons.

    If anyone else wants to attend the Festival Club gathering the ticket can be purchased at the ticket office on John Street accross from Langtons for 5 Euros.

    • Adam Byrne

      Tony, I will be there at 8.45pm exactly on Sat. night. That’s if I don’t see you on Friday, I am arriving Friday afternoon. Might see you at the B and B or down town later?

      • Tony Brogan

        my schedule friday
        6-7.15 is the euro crisis over
        7.30-8.45 Which countries…
        9.15-10.30 What are the defining issues

        Stop at langtons see who is around etc
        Back to bnb

        Sat 0930 bnb breakfast

  42. Tony Brogan

    Gold moves from west to east in record amounts.Westerners decide they can’t eat gold so will be rid of the barbarous relic. It is hoped the Easterners will get indigestion.

    Jim Willie (Hat Trick Letter)


    Jonathan Kosares of USAGold focuses his attention in the argument against the correlation on the consumer purchase patterns and prices paid. Still housing costs dominate the household budgets, then transportation and food. The biggest escalation in price has been seen in gasoline (+100%), coffee (+87%), eggs (56%), meat (+40%), and electricity (+41%) since 2005. Although the USDollar has gained ground versus the embattled Euro currency, all major currencies have lost significant value versus the Gold price. Kosares concluded, “The net result is that the dollar index remains tightly bound in its range, as do all of the other currencies, yet all devalue against real goods and services. As currency wars ramp up, the nominal values applied to currencies in this model will become increasingly irrelevant and misleading. In fact, one could argue, given its decline across so many areas, that a collapse in the value of the dollar is already taking place, and it is being disguised, not displayed, by the dollar index.” See the Gold Seek article (CLICK HERE).


    Over the first seven months of the year, the United States has run up a huge gold deficit, after exports of a record 424 metric tons of gold. The ramp-up is significant, since the US exported a total of 488 metric tons for the entire year in 2011. According to the US Geological Survey, their July Gold Mineral Industry Survey states the US only imported 188 metric tons of gold between January and July, but exported 424 metric tons. The resulting deficit amounts to 102 metric tons. One would think the big shortfall would make the financial news. Some of this deficit was compensated by the domestic US gold mine supply. Factor in the domestic gold mine supply plus the gold imports in the first seven months of 2012, to find the United States ran a large 102 metric ton gold account deficit. The United States is exporting record volumes of gold. The majority of it is being sent to Switzerland, London, and Hong Kong. Without a doubt, these large gold exports from the land that constantly denigrates gold are intended to fill the insatiable demand for physical gold by the Eastern buyers. The US is helping to backstop the European big bullion banks that are under siege from demand by China and the Dragon Family. This data confirms, or at least provides some corroborating evidence, that the London banks are being drained of gold.

    The United States produced 134 metric tons of gold between January and July of 2012. Shown in a table from the linked article, with source again the US Geological Survey, of the total 134 metric tons of gold produced in the country, Nevada supplied 102 metric tons or 76% of the overall amount. Alaska produced 11% of the US production. The three nations of Switzerland, London, and Hong Kong are major bank centers. Clearly, Hong Kong is taking delivery of massive orders on behalf of their many diverse Asian clients. They surely have lost patience with the banker fraud, monetary excesses from QE initiatives, and the debasement of their outsized reserves in possession. The arrivals to the Swiss and London locations are to backstop the enormous deliveries to Eastern clients. Switzerland received the largest share of the gold, importing 137.3 metric tons of gold from the US, while the United Kingdom came in second at 84.3 mt, followed by Hong Kong at 74.5 mt. These three countries alone imported 70% of all the entire 424 mt gold exported from the United States during this time. Other nations involved in the exports were Australia, Canada, India, and Thailand. See the Silver Doctors article (CLICK HERE).

    Subscribe to the Hat Trick Letter for the full article.

  43. Tony Brogan

    October 30, 2012, at 11:52 am
    by Jim Sinclair

    The Invisible Hand Is A Master of What the Public Ignores

    CIGA Eric

    Those frustrated by timing gold have two choices. Remove opinion and emotion by (1) turning off the quote machine and refrain from using leverage going forward, or (2) through mathematical study of money flows, confidence, and time to interpret the market. The latter is much harder than the former.

    Those expecting gold to transition from the power D-wave decline (DOWN) to C-wave advance (UP), thus, skipping the AB transition fail to recognize the importance of price management by the invisible hand to prevent what Jim Sinclair describes as follows:

    The more money you create, the more money you must continue to create until it goes to infinity. You go cold turkey on money creation, you unleash the economic wrath of hell in the entire Western world. It all comes down in one great implosion.

    Russia and China would act immediately economically to take full and powerful advantage of your error in application. You have to wean a drug addict off the drug in order to not kill him in recovery.

    The stakes of this monetary game, not widely understood or well played, are extremely high.

    The secular bull market follows a basic ABCD cycle. AB transitions transfer ownership of the trend from weak to strong hands before the powerful C-wave advance due to start in 2013. While the investment world tends to focus solely on price, they completely ignore money flows, confidence , and TIME. The invisible hand profits from a rising trend without heavy long side exposure because it’s the master of what the public ignores.

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