November 26, 2012

Welcome to two-tier Ireland

Posted in Sunday Business Post · 190 comments ·

Last week provided a very interesting picture about what is actually happening, not just to the Irish economy, but to the broader European economy, and how the various policy responses over the past few years are affecting us all. The picture is not a particularly pretty one because it shows that money is available to big, government-backed companies and enterprises, but not to small, job-creating entities.

The upshot of this Great Recession will be the hollowing-out of the productive marrow of the economy while, at the same time, large, lugubrious entities will probably survive because they have access to
precious credit.

The story of Ireland is the tale of two sectors. If you are big and have a stream of income – like a big power company with regular payments which can be used as collateral for a new loan, or a bank with paying customers, or even a state with taxpayers – you will get cash.

If you are small with a good business model but facing stiff competition and precious few assets to mortgage, you can forget about it.

So the good news is that there is plenty of money around; the bad news is it is going to the wrong people – or, at least, not going to the right people.

In the last couple of weeks, the Irish state, as well as a few big semi-state companies and a barely breathing bank such as Bank of Ireland – with a mortgage book in tatters – showed that they could borrow money at reasonable rates. The reason is that they all have a stream of income which can be re-mortgaged.

Take the likes of Bord Gáis and ESB, the big, top-heavy industrial conglomerates. They can borrow because they are not far off being monopolies. They can raise their prices and investors know that people will pay, not least because people don’t tend to default on their gas and electricity bills, because they will be cut off.

In addition, in some cases there must be a privatisation play going on, where the lenders are fairly confident that the long-term future for these companies is that they will be flogged in the great
fire-sale that always follows a state revenue collapse. The borrowing today may well be to finance the front-loaded cost-cutting and redundancies which will happen ahead of privatisation.

Certainly, large redundancies in the big banks will demand a huge amount of cash straight away, and maybe the same is in store for the utilities. Just bear this in mind as we move into 2013.

In contrast to the abundance of cash in the conglomerates, out in the real economy, small business is starved of cash. This is a huge problem because it means that there are two realities in Ireland. In
the small company sector, there is an ongoing credit crunch but, in the big conglomerates, there is an abundance of credit.

In terms of recovery, this is not a pretty picture because we know that in the past few years all over the world, small, young companies with payrolls of under 20 are the very companies that are creating
wealth and employment, while large companies have been employment-destroyers.

Contrast the ease with which big conglomerates raised huge amounts of money on the markets last week with the difficulty faced by small businesses to get tiny loans. Survey data indicates that Irish SMEs have the second-lowest approval level for loans in the eurozone behind Greece. One quarter of loan and overdraft applications for small businesses are rejected.

Central Bank figures show that lending to small and medium enterprises fell by €390 million to €26.6 billion in the second quarter of 2012, representing a 4.6 per cent fall from June 2011 in lending to
non-financial, non-property SMEs.

Looking at retail sales, we see a small annual rise in the third quarter of this year over the same period last year. But this comes after falls in the first two quarters of the year, and the fact that
retail sales have fallen continuously in every quarter since 2010.

A good barometer of general lending and purchasing is car sales. In the last month, two major car dealerships went into receivership.

And while September reveals a small rise, car sales fell by 5.7 per cent in August 2012 and by 3.2 per cent in July. Overall, in the first seven months of 2012, new car sales were down 12 per cent on last

We can see a dichotomy emerging. There is money if you are big, and no credit if you are small. And we know that small companies are today’s job creators. So the job creators are being starved of the essential lubricant of commerce, while the job destroyers (the big companies laying off people) are fully funded, maybe for the explicit purpose of destroying jobs.

Now, we have to ask: if the big utilities are getting money at decent rates, where is it coming from?

The answer to this is the ECB, and its massive cash for trash scheme, known as ‘LTRO’. A year ago, Mario Draghi was ordained head of the ECB. He immediately set about pumping one trillion euro of cash into Europe’s banks. He accepted ‘trashy’ collateral from the banks and, in return, gave them real cash, so that they could lend to governments or any other reasonably safe investment.

So we had the spectacle of bust banks lending to bust governments – and we called it a success. Now that government bond yields have fallen dramatically as a result of this deluge of cheap cash, the banks that have all this cash are looking for other homes for it.

After all, one trillion euro is a lot of money. If you were to spend €1 million euro a day, it would take you 2,740 years to spend one trillion. So there is a lot of cash to go around. But the banks don’t want to lend to anything as risky as a small business. They prefer governments and large, semi-state businesses, which have a captive, uncompetitive market.

This is why the large conglomerates are getting money.

The disingenuous reason articulated by those who might like to spin the story is that the access to funds by ‘official’ Ireland is indicative of the economy turning the corner, or something like that. This is rubbish. It is indicative of another misallocation of capital, like the misallocation of capital to the property market in the boom.

More worryingly, it reveals that one part of the economy (the protected, monopolistic part) has ample funds, while the other side (the productive, competitive part) has none.

This development reveals why recessions driven by a credit boom and bust are so debilitating. In the upswing, too much credit goes to the wrong places, and in the downturn, not enough credit goes to the right places.

  1. Beaver

    My question: Is some of that low interest money (LTRO) going to banks to let them survive the low interest trackers they gave out?. If it is the tracker holders can breath easy and their only fear is deflation or a return to the punt and punt interest rates.

  2. gizzy

    The loan approval figures are false. The Banks get around this by offering heavily conditioned loans where the client cannot meet the conditions but it is an approval or approve a smaller amount than the customer requests . I heard one recently where the small business asked for 50k and was approved 5 k. That technically is an approval.

    David At some stage can you do an article on the plight of the self employed whose businesses have failed. They are being treated like pariahs by the State. Some of the stories I have heard are shocking. Some of these people empoyed people for thirty years. Some were Paye up to a few years ago and then opened their own business and find they can get no help from the State while others wjho were not self emploed and who never contributed to The State in anyway can.

  3. Tommy02

    What I find distressing is the recent news report on RTE re 6 stalled schools projects as the builders have ceased to trade. This has has a knock on effect on the subcontractors and suppliers. So these projects have had a negative impact on job creation and have in fact caused job losses.

  4. transitionman

    WTF DMW Conspiracy ??
    “So the job creators are being starved of the essential lubricant of commerce, while the job destroyers (the big companies laying off people) are fully funded, maybe for the explicit purpose of destroying jobs.”

    • Tony

      Yeah, that’s strange. It jumped out at me too. I’m obviously missing something, but the only way I can make sense of it, is that he’s implying that the banks don’t lend to small business, in order to reduce their loan book resulting in them (the banks) not needing so many employees. Based on that premise, it follows that the “safe” loans to big companies don’t need to be “looked after”. Some clarification required there David.

      • Philip

        Think Monopoly. It;’s a safe bet.

      • supermankevin1

        The banks are not lending to small businesses because they need to reduce their risk profile. Also their loan books still need to be greatly reduced in order for the banks to become sustainable financial institution. This size of the bank is sure to shrink given its market is doing so i.e there a limited ‘safe’ lending opportunities. No loans are truly safe in the 21st century with every business susceptible to demise so I would not say that it doesn’t need to be looked after but that those loans are less likely to be chased for repayments.

      • daveyboy

        Laying off large swathes of staff involves a large amount of up-front capital, always in the form of cash.

    • bonbon

      It is simple. The large and very large have become banks under various holding arrangements. The model is the now nationalized General Motors – GMAC was the only piece making a profit at the end, a financial division.

      Siemens, and all the rest have substantial banking arms.

      So again, banks are lending to banks. Those companies are not creating jobs as DMcW notes.

      This is the problem of private international financial organizations, like the Fed and the ECB, helping each other out with their toxic dumps.

      Greece is what actually happens as long as this is allowd to go on by sovereign nations.

  5. Adam Byrne


  6. molly

    David you remark on the two tier Ireland and no money for small new and existing company’s ,be they sole traders of limited company’s .
    The truth is that the last and present government have made such a cows arse of this country that the few who do spend don’t come any where near whats needed to insure the survival of the above self employed.
    The bigger picture is the existing self employed are destroyed before you even start on the new self employed.
    Who wants to be self employed most that do are reduced like me to a one man band,because its simple there’s to much hassle employing people,I have employed people in the past and its like trying to clime an ice berg in your nude.
    Going to the bank with your buiness plan and your projected figures,how can you project in a country run by self serving fools.
    The government won’t put your income tax up what a load of bull that is ,it’s a double meaning that one .
    What they should say is we won’t put up income tax but we will hammer your cost of living so you can’t survive ,you can’t trive and we will make it impossible for you to survive,employe or even try.

  7. Philip

    As you know I like to slag off the conspiracy theories and point out the gross competencies of Big Organisation to organise the proverbial a pi$$up in a brewery. But after reading this article, a few lights start to come on.

    All the big organizations referenced have 4 things in common
    1) Utility (Banks are really utilities if they work right)
    2) Monopoly (High cost of market entry and hi/ major life impact to end user)
    3) Low elasticity to demand – meaning you can charge what you like and they pay
    4) Most worry – will be subject in the short to medium term to denationalising via firesale and an encouragement to ensure not one single penny of output from national resources ever benefit the local national. And water and soon food will be next.

    Even in Ireland, the rights of a Landlord are severely curtailed when it comes to cutting off water or gas or electricity to a problem tenant. And indeed, the utility can be limited as well. What you are looking at here is giving power to unanswerable 3rd parties who can turn you off on a whim.

    One of the things I do notice about a lot of the power bases in these organisations is they are old (50s/60s plus), no families and are content to just survive (because all is nice thanks). You look at Governament and Civil Servants and the vast majority fit this profile and seem to swell up on countless dinner parties and what else hosted by these monopolies. Also, when you see how these guys think…all must be on a grand scale…not mickey mouse operatons – we want Multinationals, and more big idustroal complexes – and lets stop these annoying little people get in the way of progress.

    It is funny how we complain about the human injustices of China and the way they sweep away 100s of sq miles of land banks for progress. Yet in our own back gardens, I have personally witnessed politicians of all hues say how they are not interested in small farty little operations and far prefer to get big boys in with the big bucks.

    Not sure if it is a conspiracy. But let’s face it, if the average politician only sees the world in terms of who is fattening him/her up, the “big” guys are only going to do what is natural. This is leadership weakness on a massive scale. Nothing more and nothing less.

    • straboe1

      This is a very interesting insight into what is happening. One can look back to the beginings of our state to see what happened. At the time when Lemass and Whiticker introduced the concept of inviting foreign investment into ireland there were lots of smes trying to develop right through the state, but instead of getting support, they were undermined by the actions of the government. We are contining with this policy. Our pathetic leadership assume that ever other Irishperson is as incompetent as they are, therefore they would rather trust into foreigners.

    • Adam Byrne

      You should start your own blog with this post Philip. Great insights and well described.

    • Perhapx

      Capitalism may be the best economical model, so far, for society, but in the end it always tends to monopoly. And without competition it become just as bureaucratic and centralised as communism.

      • EMMETTOR

        Exactly, Perphax. This is acknowledged by any economist I’ve ever read but none of them have ever come up with a solution, apart from regulation and our current model of capitalism is way more centralised than communism. The most successful companies in the world have achieved their success by subverting and avoiding competition at every turn, think Microsoft, for example.

  8. Interesting Article.

    I’m glad to see some perspective being put on the fact that Governments can borrow at low rates of interest.

    I do have an issue with the description of the ‘Trash for Cash’ scheme though.

    What actually happens is the ECB, via the national central banks, creates reserve-account-money for the commercial banks. We cannot ignore the fact that every Euro of reserve-account-money has a matching debt to the national central banks. Inverting your description – if the commercial banks repaid a million a day it would take them 2,740 years to repay this LTRO money.

    Once the banks’ reserve accounts are considered high they are in a position to create bank-account-money. To buy a government bond, the banks type brand new money into the seller’s account. If the banks are in a position to create a lot of money it may sound like a good thing but, again, we cannot ignore the fact that every euro of bank-account-money is also created in line with a debt to the banks.

    Perhaps David does understand this fully and I can only assume he’s simplifying it (To the point of falsification, mind). In fairness, it’s not a simple description but it’s crucial that we understand the monetary system fully and our journalists should take the time to educate themselves and then us.

    • bonbon

      We all understand very well the monetarist idiom. It is time the break with all that, and go with the Hamiltonian banking insight that FDR applied very nicely.

      The key to this is a metaphor, that all thinking adults can grasp – no linear plausibile hand-waving here!

      Triple Curve typical Collapse Function

      What is crucial to assimilate is the simultaneous action of all 3 curves, one of them being the very economic basis for your very existence.

  9. Adelaide

    Before my comment I’d like to congratulate the organisers of Saturday’s anti-austerity protest for their carnival set-pieces which alleviated the dreary weather. They showed that an anti-austerity protest does not have to be a necessarily grim affair and it left a positive impression in many people’s minds whose Saturday’s protest was their first.

    ..Governments have evolved into what can only be described as commercial conglomerates. The concept of governance and the pricipal purpose of government to uphold democracy have long been abandoned. It’s a business, nothing more. And that our taxes go fund a congomerate business which also borrows on the open markets for no reason relevant to its principal purpose grates my libertarian backside.

    • bonbon

      Government has been replaced with Governance, Mr. Blair’s term actually. And due Dilligence for the banks, of the banks and by the banks.

      Governance is a libertarian icon.

  10. straboe1

    I think I will probably shock a lot of your followers as I will suggest something that will be anathema to them. We have aform of poor peoples bank at present, the credit unions. I believe that we shoild aim to develop a co-operative commercial bank through the credit union movement. This bank could concentrate on providinf loans sme and ordinary members wishing to set up a small business, especially community co-operatives. In your other article today David you discuss the diaspra, I would envisage small community co-ops seeking members of the diaspro who have connections with the area within which the co-op mis being developed purchasing shares in the co-op so as to help the people with whom they are connected. I am not putting forward all my thoughts on this subject, I just submit this basic idea for discussion.

    • bonbon

      Thinking “small”, the mantra of Chesterton Distributionists and Austrian Hayek alike, is to doom the country. No bank of whatever type can have the slightest chance of functioning in reconstruction without Glass-Steagall on a transatlantic scale separating risk off.

      A Marshall Plan for the MED for example, will not function without national credit systems free of the zombie “investment” losses. DMcW notes a write-down is necessary, but that will never occur without Glass-Steagall.

      When Glass-Steagall passes into law again, there will be no liquid money, so urgent national credit creation for Reconstruction must immediately occur on national scales.

      Then credit unions can function.

  11. michaelcoughlan


    The article basically states the obvious and can be summarised in the following few sentences:

    “Since the banking industry orchestrated crash where self-serving managers in the financial industry were paid enormous sums of money for NOT doing their jobs properly in fact doing the complete opposite (assessing risk and placing capital) we now have dejavu where the same mind-set predominates and the various financial institution are still paying enormous sums of money to similarly minded individuals for NOT doing their jobs properly (assessing risk and placing capital)”

    Hmmm…………. And knowledgeable commentators like you still drawing salaries for creatively writing about the status quo?

    Reading your articles McWilliams are becoming increasingly wearisome. Please don’t state the obvious; “But you’re not being forced to read the articles”.

    • Adelaide

      In all fairness RE repetition, there is only a finite number of ways to describe a ponzi scheme. What is wearisome is the Irish public’s apathy and their almost deliberate self-censored lack of knowledge/curiousity/interest. An article examining the causes of the general apathy out there could prove controversial and ruffle a few smug feathers .

      • supermankevin1

        indeed! Being apathetic seems to be a new national trait amongst many young people (not just Irish, to be fair) I meet

      • michaelcoughlan

        Hi Adelaide,

        Thanks for your response.

        I agree with your observation on apathy. The only way now for those of us to survive in Ireland is to realise that we who choose to live in this beautiful country must establish ourselves and thrive here in SPITE of the people who run the place (bankers/Politicians).

        A few simple rules need to be observed to ensure the we who love this country will not be forced out of it.


        Stop wasting our time believing that the bankers or politicians will put the interest of their customers or voters first. They won’t. Once you achieve this goal you will feel very liberated.


        Do what you can do for yourself (not in a selfish or self-centred way) to ensure you take responsibility for you and your own family and circumstances i.e. don’t expect the state to do it for you because increasingly they can’t.


        Don’t waste your own valuable time with recriminations regarding why the country is in the hole it’s in because even if you are right and chances are you will be what difference does that make to you? You are still a citizen who is proved right who is still in a hole.


        Look for circumstances and companies which are thriving despite the state of the nation. McWilliams himself is one of the most successful examples. By his own admission when he worked in financial organisations he saw “go along to get along merchants” getting promoted and people like himself voting with their feet with the scumbags in charge secretly delighted that such capable and talented individuals were leaving. And what is he now? A very successful and capable individual making a very good living for himself in many different arenas.


        Try to open a bank account in another jurisdiction like Northern Ireland so that you can place some money there however small in the event of an Argentinian like melt down in Ireland. Try to hold some savings in hard currency at home such as Canadian dollars or Norwegian Krone. Try to hold some savings in gold using the service of bullion vault or gold money. Try to develop the skills to manage your own retirement account since most pension fund managers are losing money hand over fist. (it’s very easy to beat those guys all you have to do is put cash in as high a deposit interest savings account as possible preferable a self-administered pension plan and chances are you will be far more successful. The compounding effect of the savings should negate inflation but if not your savings held in hard currencies and gold will work like a hedge to protect you).


        Very importantly seek out like minded individuals so that you can prosper from the positive vibe and Discard individuals with negative though process and experiences.


        Most importantly have fun! Do what you like doing and don’t apologise to anyone on the planet for doing so!

    • Hi Michael

      As you know I am a great believer in openess and I believe that, as far as I can make out, criticism is the only known antidote to error, so keep the criticism coming and I will take it on board.

      All the best


      • bonbon

        But criticism does not mean one is in fact in error, at least not all of the time.

      • michaelcoughlan

        Hi David,

        Of your many gifts I most admire your courage and integrity. I didn’t mean to appear sarcastic or critical. I just wish to god knowledgeable commentators like yourself could be even more pointed than you are. I have tried to follow your lead and am very happy when critical responses of my own posts are made as I know it’s only then I can broaden my own mind and learn.

        I saw the article by Mr Rehn in the SBP and he went on patronising the Irish people about austerity and so forth and the narrowing of the spreads on the Irish bonds and I thought what a plonker. I am so sick of these guys getting paid vast sums of money for not doing their jobs properly and agree with the responses to my post from the other commentators above.

        Yours sincerely,


      • ‘As you know I am a great believer in openess’

        I am laughing David. I can’t believe you actually did that.
        You are a very funny guy.

    • Deco

      Michael Coughlan,

      Have you any idea how few commentators in the Irish media, print an article that “states the obvious” as you put it ?

      Or how rare it is ?

      If you want rubbish you can always wait until Friday and buy the IT BS (Business Supplment). But mostly it is a load of BS.

      • michaelcoughlan

        Hi Deco,

        As far as I can make out we are singing from the same hymn sheet. I don’t want rubbish. In fact I have initiated a recycling policy in my home of my wife and I and our three young kids which has reduced our rubbish to zero as in Nada. I have a small collector for non recyclables such as broken plates etc which still isn’t full after two years and that’s it.

        I agree with you regarding the media as in my view the same modus operandi applies to the employees in RTE for example as the Irish banks. Brian Dobson for example has a salary of over €200k pa and for what? Reading out the lines put in front of him by the puppeteers higher up no matter how ridiculous.

        In order for McWilliams to be more of a heavy hitter he needs to make commentary which is ahead of the curve rather than just describing that which most of us know already that the banks are parasitic and the life forms who operate them whilst human in appearance are not human in their own view of the world around them. Otherwise McWilliams will fall into the trap outlined by your very valid criticism which is more nonsense and simply painting a picture of the way things are right now with no one at all having the courage to print hard hitting, valid, weighty commentary.

        Yours sincerely,


        • bonbon

          Ahead of the curve means the future, and that is my subject as well. Forecasting, the key economic activity, is not easy, and well, most prefer hind-casting.

          The popularity of the present’s “trends” (into the can), and the fascination with the criminality of those evil-doers, is Hamlet, pure and simple. People “Hamlet out” when given the chance to change things. Not everyone, not all the time, but enough. The fear of the unknown, from which none return is this popularity problem.
          The future can be known, contrary to Hamlet. It means acting creatively, outflanking the “trends”. At least the “trends” tell us what the enemy’s view of the future is.

    • joehas

      I too write Op Eds and I sympathise here with David.

      The tone of my articles has got less and less subtle and more and more wearisome as I see the same mistakes being repeated and … we haven’t even got ourselves out of this mess yet!

      A PR guy I used to work with once told me “its only when they say they are sick of it that you know the message is getting through.

      Here is Spain, politicians are continuing to appoint cronys without experience to the boards of banks, they are continuing to propose construction over education/R&D as the way out of the crisis and unless you spell-it-out like David has done here, you are accused of talking down the economy.

      So now in public debate as in print, I speak as if I´m talking to a child and don´ give even an inch to the “los pisos nunca bajan” (there is never a bad time to buy property) lobby.

      If you missed this, Researchers Discovered The Psychological Reason That People Like To Invest In unproductive, low yield sectors like housing.

  12. Boomerang Theory

    Home Security is the missing link for the few that can convince the bank to lend eventually . This leads to Debth by a thousand fleas .

    • Philip

      Home security is a joke. If you do not pay the gas bill, you get frozen out. So will u be able to stay even if the bank bills are paid?

      • I mean giving to the bank your home title deeds as security to eventually convince the bank to give you a business loan .

        • Philip

          Oh I know. It is dreadful. Very aware of what I call security dilution via securitizing. And it happened for far more trivial than real business.

          The thing is, people realise how poor security of home is. A total joke.

  13. Areamist

    From a banks perspective, having to deal with minute, high-risk, trivial and bothersome transactions is more painful( although lucrative) than watching paint dry. Thats why we will never be welcome to accept a loan based on fairness or merit, Big Business have lobbyists to do their legwork. The rule of law offers protection where justice rules honestly, when we depend on political justice… it is the rule and might of the lobbyist that moulds our paradigms of fairness and chains our politicians who yearn to retain office in order to create just rewards for the powerful.
    We do not live in a perfect world but we shouldn’t allow unfairness to blight our path. Micro business and small business need a decent business proof package underwritten by the Dept of Finance otherwise it is the black economy that will thrive and whatever spending remains will flow to the oligarchs and the monopolies.

  14. gizzy

    The obvious point is that the Irish Banks are not lending to anyone even Crporates. The corporates do not deal with them even for deposits because of their sub standard credit grades. The Copoates and Utilities are borrwing from overseas Banks. The point here is that domestic small business does not have a choice but to use our pillar banks and they are still in a mess, not fit for purpose and in no position to bank the highest risk sector in a bad economy.

  15. Areamist

    What options are out there for our Government to get their mits on cash? What about the big accounts on deposits by some of the multinationals sure a bond agreement with these could be reached to release liquidity into the jobs sector?

  16. Good article. Hope you enjoyed the LUFC links.

    There is no doubt that this is a two tier economy – the link below hints that FG are a nasty piece of work who would love another go at low earmers and the unemployed rather than the wealthy.

    It appears that Ireland is a very divided nation (between old and young and rich and poor) and that Labour is keeping the blueshirts in check. We have not witnessed state violence against the populace, yet, but I think it’s only a matter of time before the mask slips

    There are plenty of nutters in the Irish government who need close observation if their future actions are to be predicted. I can imagine what it would be like if some of these neanderthals were let off the chain. I am sure some of them would happliy see us all implanted with RFID chips

    If FG was given complete control tomorrow then we would be stifled and dominated by political and corporate power and control for ever. That is fascism and it’s coming. I think this article will switch on lights inside heads and that some of your readers will think ‘I am not mad – even HE can see it’

    Budget 2013: FG threatens to put dole on table for cuts

  17. transitionman

    Alternative funding
    Top 40 Platforms for Crowdfunding Social Change |  REconomy

  18. Lord Jimbo

    Emergence of monopolies is a standard feature of a recession or ‘Great Recession’.

    The article is an important one as it highlights once again how the game is being played out in the ‘real economy’ to the benefit of the massively connected and to the detriment of the general population. Banks it would seem can get away with just about anything, appalling lending and pay practices in boom, appalling claw back policies and pay practices in bust. The extent to which they call the shots is actually quite remarkable but when you have winners you also have losers and these usual suspects: the unemployed, the poor, the disabled, the sick and the old will all be targeted in a few weeks as part of the ‘tough decisions’ mantra which is leading us nowhere but to further decline.

    This entire period is acquiring a close resemblence to what Charles Dickens wrote about, the miserly banker, the struggling poor who get poorer, with the squeezed middle in between trying to get through it all. Divided society reflected in a divided economy.

    • bonbon

      Since Dickens and the Irish genocide of 1846, we have had the Nürnberg Tribunal. What hung the accused was the very clear “could have known and should have known the effect of their policies in that position of power”.

      It is time to remind all “tough deciders” what they are doing. The ESM contract seems to be written to protect the accountable from this precedent.

      Since Dickens we have had the German Customs Union, the National Bank of Hamilton, Arthur Griffith, FDR, and now the Triple Curve. We have come a long way, and with FDR’s insight know exactly what to do.

      The London Financial Times chose to call for Franklin Delaney Roosevelt’s Glass-Steagall on the US Indepencence Day, the 4th of July, something Dickens could not conceive of.

      • Lord Jimbo

        The point I was trying to make was that all the gains between Dickens and now, some of which you have pointed out, have either vanished, been removed or left run out as in the case of Glass-Steagall, it was not renewed for obvious reasons and the administration that allowed that is feted as one of the greatest in the post-war era, hard to make it up.

        • bonbon

          We have these precedents now – in Dicken’s time not. People are aware of loosing something they already had. Swindles like housing bubbles existed before (Louisiana and Tulip). It is as if there is an effort to roll back history, a theme that pops up regularly.

          To what “glorious past”, I wonder?

  19. Grey Fox

    There is an alternative to the two tiered system throughout Ireland and it is Direct Democracy Ireland
    Read the website and if you believe as I do that this is an extremely viable alternative come along to a meeting in the Red Cow Morans Hotel at the Red Cow Roundabout on the M50 Dublin this Thursday Nov 29th at 8pm and get involved, stand up! the time is NOW!

    • From the site

      On the night of the government’s secret bank guarantee Brian Lenihan would not have been able to sign off on the bailout. He would not have had the authority to indebt the people of the country to the banks in the sum of €64,000,000,000. Instead he would have simply told the people who allegedly persuaded him, that Ireland had a system called Direct Democracy and that in that system the government had a lawful duty call within days for a referendum to decide on this matter.

      • Grey Fox

        You got it in one! Pauldiv, and that is just the start!
        The people will not screw themselves!

      • Perhapx

        I am interested in direct democracy but would it work. How would we attract foreign investment to our country when all our cards are face up and say a competing country holding theirs close to their chests, so to speak. Imagine that you were our appointed negotiating representative, playing a poker hand, in that situation. Could that work. We must survive in the global economy. Direct Democracy would only works in a level playing field. It is not an evolutionary stable strategy for a small idea. It would be devoured by ruthless outsiders. Or would it?

        • Grey Fox

          I believe its simplicity is the biggest hurdle people have to get over when trying to understand the freedom of Direct Democracy, we live in one of the wealthiest countries in the world, we hold the largest territory because of our positioning on the periphery of Europe, successive governments have sold us out, given away our wealth, we should enjoy an extremely high standard of living but we don’t. Europe has not been good for Ireland, Europe is rotten at its core and so no good can come of it, millions disappear between the cracks every year, there have been no audited accounts for the EU in 18 years! the fact that Europe cannot get one of the big four Accounting monsters to sign off on accounts speaks volumes when we are so aware of the accounts they will sign off on, even close to home, Anglo, PTSB etc… the creativity required hasn’t been thought of yet.
          Successive governments have proven they are not capable of leadership in the Country so I believe it is time for the people to take the power back, again I say, the people will not screw themselves!
          Make no mistake, this is a gargantuan task, but a noble and worthy one, the traditional parties are not taking too much notice now but they will quake in their boots when the numbers start growing, Direct Democracy Ireland will grow organically, only the seed needs to be planted because we are a smart nation, an educated nation.

          • cooldude

            You are right Grey Fox this is a gargantuan task but you are going the right way about it. I posted my membership form a couple of days ago and am proud to help to try and reintroduce proper accountability back to this country. I was listening to that sleveen O Reilly on the radio this morning and I nearly puked. What a low life shady deal maker. And the rest of them aren’t that much better. I would urge everyone to go through the website as it addresses many of the issues we discuss here every week.

      • bonbon

        Very strange note on Lenihan – he would have and could have? No one believes for a moment Cowan and Lenihan “would have” done anything different. The Troika crowd know all that, and even gave Ireland multiple chances to say yes. Recall is one DD method. Look at Wisconsin, mentioned below, where Gov. Walker, who bails out Wall Street, defeated the Recall motion.

        Recall put Schwarzenegger in CA, and look what he did – “kicked the butts of special interests” – meaning teachers, nurses, police.

        DD is not a new idea, and has always been the chosen tool of “vested interests” against the Public Good.

  20. rebean

    Had a quick scan through the article as you do sometimes on Mondays. The one thing that stood out was the ESB and Bord Gais being able to raise money because they can fleece everyone for their electricity. This occured to me recently as I wondered why Rabitte our hero from labour wont do the job he was elected to do. All labour voters use electricity but this does not seem to matter to Pat. So we pay the highest ESB rates in Europe.

  21. george

    David one of the most powerful articles I’ve ever read from you. Your argument which I completely share, is so dramatic and demoralising, that one feels completely powerless. If this is going to lay the foundations for the Societies of future generations, not only I feel sad for us but even more for them.
    History has vindicated Jesus who turned the tables of the money changers, so unless we are ready as a Civil Society to respond to this threat, with an effective way of reverting the actual situation, we have no hope of a dignified existence for ourselves, or our children.
    Capitalism without any reasonable controls, ends up in what we are seeing today.
    GPs charging 50 to 60 euro to see a person for 5 minutes, and Politicians and Top Officials living like royalty, on the back of small business people, who produce useful things and create employment; and playing into the hands of rotten money lenders, so called “Banks”.
    What you’ve described, is not only awful but evil as well!

      • bonbon

        Which comes from Empire – from Babylon via Rome, Venice Amsterdam, London and now the British Empire. Even a Tiger can see “fascism”, Mussolini’s communitariansm, is Roman.

      • Grey Fox

        It is coming to an end if the People are given a chance to voice their true wishes, Government derives all it’s power to govern from the people how long do we really think the obscene pay will continue if the the people have an opportunity to vote directly with regard to it, how long will support for the banks last? Senior Civil Servants Pay? Additional Stealth Taxes?

        ” People can clearly see that taking money from someone by force or under duress is a crime when done by individuals, but they fail to recognise the criminality of the same act when done by Government”
        and to add insult to injury, in the name of repaying the ganbling debts of corrupt banks, the same banks spoken about in the above article who are creating further evidence of a two tiered society in conjunction with government who are on the same path with regard to health services.
        Wake Up

        • gizzy

          I have never being a member of a political party but my wife and I are joining up.

          • Grey Fox

            Good for you Gizzy, this thing is about to snowball, because the truth is incontrovertible.
            Truth Stands Supreme
            Truth Affects But Cannot Be Affected
            the vast and overriding majority of Irish People are smart, articulate, decent human beings and they know what they see is wrong on so many levels, given half a chance to right these wrongs they will not hesitate for one minute!

        • Grey Fox

          Direct Democracy is the ONLY true democracy, as it was laid out by the founding fathers of our state, it is very important to remember that it was a Fine Gael government who removed the sections of the constitution in 1937 which gave the people the right to referendum, they did not remove these sections with the consent of the people -No Referendum Was Held!
          These sections are more important than ever and stand as a testament to the wisdom of our founding fathers.
          This is our right and should be reinstated forthwith.

        • bonbon

          It is not a matter of “taking money”, it is a matter of literally killing the physical economy, leading straight to literally culling people, starting with the chronically ill, old, infirm, very young, and then they come for you the able-bodied workers with no jobs. I certainly hope “Direct Democracy” is not there to protect the wallet of the rich, as happened in California with Schwarzenegger’s use of these rules.

          This is Aktion T4, the 1939 Berlin Health Ministry, Tiergarten 4, secret document produced as evidence at the Nürnberg Tribunal. Dr. Alexander said the small step of putting a price on life, classifying people for healthcare, opened the door to the rest – it was that first step. Hidden by this “two-tier” carryon, is a real physical collapse.

          Remind anyone this is what “saving for the effort” really means and we have a precedent. This is why Obama grew a mustache with Obamacare. Of course Tigers will say “we would never go down that road”. You are on the boithrin already!

          The alternative is a real economic program, learnt from experience with this madness. The 3 point program which I will post here. People must wish for this – it is progress explicitly.

        • george

          Grey Fox fantastic information! I didn’t know anything about them and I didn’t finish reading everything in the webpage, but for what I already have read everything surpass my expectations. If the rest is in the same line, I’m joining them with all my hearth. Then we’ll have to spread the word. Now I feel proud to be Irish!!!!!!!!!!!!!!
          I’m going to take the laptop to bed with me and read the rest.
          Now I feel there is a light at the end of the tunnel, and the “rEvolution is possible!
          Thank you very much. Cheers!

          • Grey Fox

            Thank You George, I feel it is my duty and honour to spread the word and assist in any way I can, I attended as a guest, a meeting of the Executive Commitee today and I came away with a real sense of pride also, the transparency was breathtaking and it is now an adopted policy to have ordinary signed up members (2 or 3) at every meeting can you see FF FG Lab extending that invitation?
            Come along on Thursday if you can, it is an open invitation, there is a recruitment drive on right now, serious efforts will be made to alert the Irish people to the existence of Direct Democracy Ireland over the coming weeks notwithstanding the ignorance of the mainstream media but we all know the reasons for that!
            Get involved! it is your Service (Party), it is all about the People, no ego’s, no personal agenda’s, it is truly the people’s party!

  22. Deco

    Excellent article. The assessment is correct. But it is not just an Irish issue. It exists in many other Western countries as well.

  23. tony_murphy

    fascism – the eu is in control and it’s a fascist takeover

    new world order incorporated

    kick them all out now….. your children depend on it

    • tony_murphy–M
      no surprise to anyone who is even partially awake and curious

      If you don’t know what new world order is and the treat it is to everyone, just go listen to the likes of Edward G Griffin, Jim Marrs and Alex Jones

    • bonbon

      The usual Tiger, brave soul, timidly avoids simply saying the British Empire. It is much more comfortable to mention “conspiracies”.

      It is not New, not, not Order, and global. And it is imploding, to the point of desperation they will use Obama to start thermonuclear war. See the Patriot missiles going to Turkey, not to mention Gaza.

      We see a joint British-Saudi operation going on, again.

      The EU may seem “in control” . what a joke. No budget could be agreed upon, it is breaking up around Brussel’s ears as it should.

      Break up the banks now, the crushing blow that’s needed. Even the UK has voices to do this – they sit right at the epicenter!

      • tony_murphy

        I sort of agree with you Bonbon. I don;t know if it’s just the British and Saudi, I do believe they are heavily involved, but there are French, Germans, Italian, Dutch etc as well.

        I have listened to Lyndon Larouche

        I have also listened to Joel Skousen talk to Alex Jones re Thermonnuclear war, Neutron bombs etc, which they will use, undoubtedly, no one should doubt it.

        Also China just launched it’s first

        WW3 paid for and setup by the globalist banksters to gain even more control

        • bonbon

          Well if they try that its all over in about 90 minutes. No need to imagine the planet after. Erdogan apparently is daft.

          China is setting up its space program and Russia is being called in to Exomars. But the real problem is Obama killing NASA, sending patriots around threatening Russia, a real British asset.

          Sure France etc are in the game up to a point. But Primes inter Pares, Britain, Blair’s Doctrine, is the key.

  24. Peter Atkinson

    If you want to get a feeling for the way this is going to play out just read up on the collapse of the Soviet Bloc.The insiders plundered all the natural resources of the Bloc while the boss man had his head stuck into a bottle of vodka.

    Boris Yeltsin v Brian Cowen.

    When the new gang emerged they made sure their mates had lined their pockets, viz a vis Roman Abramovich et el.We only have to look around to see our own shining lights emerge with bulging pockets full of cash.

    And speaking of bulging pockets full of cash.The crowds were hissing and booing at the trade union movement on the march on Saturday.Snouts in the trough and all that.It got me thinking of the Eircom IPO ponzi scheme back in the noughties.Check out the wedge that the golden circle managed to extract on at least two occasions.Part of that golden circle were certain trade unionists who were complicit in this scam and the poor unfortunate investors, many of whom were PAYE/PRSI card carrying punters once again picked up the tab.

    Maybe its time that some form of public enquiry was held to expose this fraud.The majority of the protagonists in this crime have long skipped town with their filthy lucre but one notable player that comes to mind has just launched a book and is a regular guest on a very high profile radio station.

    Maybe if the ordinary present and past employees of Eircom stood up and spoke out we could get to the bottom of what exactly was happening at the time.

    David maybe you might like to have a little poke around at this one.

    • Praetorian

      The similarities between now and the early to mid-1990s in the Soviet Union is actually an interesting analogy and not one I previously considered. The manner in which potential natural resources off our coastline is being handled being particularly insightful.

  25. Tony Brogan

    Again no one mentions the root of the problem in Ireland and around the world.
    The central banking system.
    Embellished by the fractional reserve banking system
    Endorsed by government.

    All money is issued as a debt. Created out of the ether by the central bank and loaned to both the commercial banks and the government at interest.
    The commercial banks can lend out 10, 20, or 30 times that amount by also producing the money out of the ether and then loaned to a borrower who is corporate or private.

    It is to be noted that this radically expands the monet y supply or inflates the money supply and thus is the cause of the monetary inflation.

    Banks have cronies in government that allow this fraud to be legalized. As has been noted the banks prefer to lend to crony insider companies who can thus spend this newly load cash into the market at par before its intrduction creats the inflation.

    The worker or pensioner, or saver, finds their income reduced in buying power as the inflation occurs but they have no new infusion of cash unless able to borrow. So the big boys benefit from inflation as they pay back the loan with debased currency while the rest suffer from inflation and so grow relatively poorer.

    This is one major explanation for the noted devide in the country.

    A solution for the long term is to
    ban central banking and close the central banks.
    Prohibit fractional reserve banking, and
    Ban the collateralization of financial instruments.

    This would remove inflation and even the financial playground.
    If sound money principals were enacted and currency issued back 100% by precious mentals and was issued by treasury and earned into existance then there would be no two tier but a solid sound economy based on sound money principles.

    Interestingly I think that Direct Democracy Ireland will advocate such a policy and allow a vote of the people to implement it.

    • bonbon

      That’s the Andrew Jackson “hard money” ploy used to destroy the Second National Bank of the USA. Populism is always suspect and used effectively hen and recently for financial interests as Arnie Schwarzenegger used direct democracy in CA.

      We need to split banks, Glass-Steagall, a precedent exists, and President Higgins has referred to this repeatedly. Ireland needs to find out more about FDR’s New Deal and the famous TVA, Tennessee Valley Authority, inspired by the Shannon Scheme, which ended the Great Depression.

      in 1932 Germany had the Lautenback Plan, offered by the Friedrich List Society, and refused – the rest is history. Arthur Griffith referred to Friedrich List’s American System of Political Economy as he founded modern Eire. So Ireland has a very profound basis for dealing with this.

      • Tony Brogan

        So you diss DDI before it is even started based on supposition.
        You advocate the use of a central bank as a solution when if you were honest and studied the problem you would have to admit they are the cause of the debt problem. Hamiltons bank was the first effort to impose a central bank on the US and was operated by agents of the “British Empire” you decry. You speak with forked tongue.
        Hamiton was an agent of Rothschild from the London based bank.

        • bonbon

          Incorrect. Andrew Jackson, the “hard money” populist, is the problem. The Bank of the United States, which Jackson was to destroy, was the chief instrument for American national resistance to the British Empire and the City of London financial power.

          It is chiefly due to Jackson’s breaking of the Bank, that academic historians and grossly misinformed populists say that “Andrew Jackson didn’t trust the bankers,” and “Jackson was for the little people, against the aristocrats.”

          This is why questions must be posed. Sovereign national banking is the way forward. The massive reconstruction after this catastrophic epoch must be planned and credit issued. Exactly this Cameron and the others are blocking at the EU budget discussions.

          • cooldude

            Bonbon it is you who is both factually and historically incorrect as usual. You really should check your history before you spout out your nonsense. The Bank charter which Andrew Jackson did not renew in 1836 was The Second Bank of the United States and the government only owned $7 million of the total assets of $35 million. In other words it was mainly a privately owned central bank , modeled on the BOE, whose main shareholders were the same international bankers who owned the BOE. Rather than being “the chief instrument for American national resistance” this privately owned central bank was controlled by the Rothschilds and the other London bankers and its only interest was the interest it was paid on it’s debt based money. The only one here “grossly misinformed” is you because you are too lazy to look into the facts surrounding the history of central banking in the US. Andrew Jackson was an American patriot who clearly understood that central banking and it’s debt based money was not only unconstitutional but was the very reason America had fought it’s war with George 111 and the London bankers. Check up on your facts in future because you keep spouting the same historically incorrect nonsense.

          • Adam Byrne

            All this bullshit is totally irrelevant lads. Move on and deal with the present. No one cares what happened in the year nineteen o’splash. We have bigger fish to fry in the here and now.

          • Tony Brogan

            Fraid it is not irrelevant Adam.
            It is crucial to understanding the real problem.

          • Adam Byrne

            Ancient history and crap Tony. Examples of how people did things wrong. Time to dream up new solutions not keep looking backwards to failures.

          • Tony Brogan

            It is the same old crap causing the problems but you can not see it. solutions have been proposed but so far being ingnored or even commented upon except in such a negative fashion as you now.

            your solution is to run and hide.

            Listen to cooldude and some others here who see the problem and have the solution. You can run but you can’t hide.

            DDI has a solution for parallel curency among their ideas. This is a world wide proposition not just mine.

            where is your solution, what ideas do you have that could help others than yourself?

          • Adam Byrne

            Run and hide! Haha, not me Tony. I have no solutions but yourself and Mr. bonbon have been going at it for months with the same old drivel and it wears thin after a while. Time to call a truce.

          • Tony Brogan

            Get back to me when you have a positive idea.

          • bonbon

            Ehem, @adam “No solutions” ? Most do not believe in a solution, and knock any attempt to pursue one. The Austrian School is locked in a Hapasburg dream, and ponzi schemers (reformed?) dream of schemes.

            Pringle should be an example to ye, he keeps pursuing the Common Good, in spite of imperial opposition.

          • cooldude

            I’m sorry Adam but Bonbon is wrong in simple facts and to me they are important. Here is something more up to date about our friends the banker elites. This Mark Carney guy who has been appointed as the new head of the BOE (wages over £600,000 ) turns out to be not just some Canadian central banking whiz but also a former Goldman Sach’s inmate. They are literally taking over everywhere. Here is a quick synopsis of who or what Goldman Sachs actually is

          • Adam Byrne

            I would have thought you would have realized that Mr. bonbon is a nutjob by now cooldude and simply ignored him.

          • Adam Byrne

            Plenty of solutions really guys but they don’t include exchanging insults on here and trading the same nonsense back and forth ad infinitum.

          • Adam Byrne

            Totally unreformed and unrepentant Mr. bonbon. Anyway, that story was more complicated than how it was characterized. I might tell it to you and Tony over a beer sometime. Some of your posts are decent Mr. bonbon, usually the ones that don’t involve pasting news articles, or banging on interminably about Hamilton, the British Empire, Blair, Obama, the Austrians and all that. Speak from the heart dude and try to be concise.

          • bonbon

            We know about Carney. We know about Goldman-Sachs – Draghi and Monti, Papademos are all GS.

            So now a Canadian Crown Dominion banker is called home to London, HQ so to speak.

        • bonbon

          And you never say what banks would be “allowed” to function, if all “central banks” were closed.

          FDR was much more creative – he split them up.

          • Tony Brogan

            commercial banks will function fine and the central banks monopoly on currency is removed. Any monetary policy required is the function of treasury which I have stated many times.

            but then again I answer your questions but you seldom
            answer others.

            When you suggest that the function of the central banks was Split by FDR he did nothing of the kind. He may have split the function of commercial and investment banks but that has nothing to do with the Central bank system.
            The central banking system was left untouched and so were the “central” problems.

            you need to educate yourself as to what a central bank is and how it functions. you propose a central bank system yourself which is what have given the money elites the great power over government.

            your statement that FDR split the central bank is misinformed and misleading and wrong.FDR devalued the currency by 60 plus percent and seized private property. Hstorians and economists debate that FDR resolved the depression with an increasing number suggesting that the US depression did not end till after the WW11 and the subsidence of the inflation of the war effort which required a large amount of money added to the system to pay the bills.

          • bonbon

            So how do you without FDR’s unique insight, distinguish commercial banks from “central banks”? Commercial banks, including those that masquerade as giant production companies, are drowning in toxic paper. Not one island of normalcy exists. Glass-Steagall is about this reality. So it is not clear what the Austrians really want.
            FDR brought the USA out of a terminal depression caused by the austerity of his 2 predecessors. Everyone here knows austerity is counterproductive. This is why I pose the most important question of all – we need mow in the EU alone 1 to 2 trillion Euro’s of productive credit to reconstruct the damage being done. We are talking big numbers here and very big projects, for which FDR’s TVA , NAWAPA are fine examples. The “central banks” are lending that to each other in a desperate gasp to save themselves. Cameron et al at the EU budget did everything to prevent any reconstruction. So it is not just banks.

          • Tony Brogan

            Sometimes bon bon you are a feckin eegit/
            You have NO , I repeat NO idea how a central bank works, what it is or who controls it or why it is the basic cause of the debts public and private OR that your GS will have NO EFFECT whatsoever on the central banks.

            You are perhaps on the central bankers side and a Rothschild agent yourelf. It is the only conclusion I can come to. There is no other explanation for being so obtuse.

            And the Depression was not caused by austerity , it was caused by the 1920′s boom created from profligate printing of huge amounts of debt based money, that finally collapsed in an unsolveable pile of credit contractions just like today.

            You are misleading, counter productive and just plain wrong in most of your opinions. your ignorance if followed will lead us to disaster.

            I am getting thoroughly annoyed at your continuous lack of rational sense. Go read up the history of the central banking system and then get back to me. This is a case where ignorance is not bliss.

          • bonbon

            It is difficult to get a clear answer from Austrian Schooler’s on productive credit and reconstruction – it seems to be missing from the curriculum. Now, since the world graduated from highschool when FDR demonstrated what even a partial application of national banking can do, we need to take the lesson seriously. This is not the Theoretical Economics Semester, rather Applied Economics. It is time to graduate, Freshman.

    • Grey Fox

      Well Said Tony, just one clarification, under Direct Democracy no governing body needs to “allow” a vote on anything, the power is in the hands of the people, if a vote is the will of 75,000 Irish people then a referendum must be held, government reverts to its true role as caretakers of our country, for and on behalf of the people, accountable for every action or non action.
      Again it is the simplicity of Direct Democracy which is its strength. The Truth Will Out

      • Tony Brogan

        Hi greyfox
        I meant to say that the system allows the people to have a vote. Not that will be allowed to have a vote by an authority.
        As you agree, the people themselves are the authority with DD.

    • ‘Both going at for months’
      Lol. ha ha ha

      Never engage HAL!
      I’ve warned people about HAL but if you tell a kid not to touch a hot plate you know they will touch the thing. The human brain is programmed to reject the concept of ‘No’

      Imagine suddenly being catapulted into outer space never to see another soul again. You know that this is for eternity and that HAL is always by your side offering you comfort. One million years of HAL. Imagine the insanity and the horror

      • Eireannach

        The entity called ‘Bonbon’ is definitely a computer algorithm.

        • Tony Brogan

          One step futher than a mole.

        • Ahem well, Eireannach that is why I call him HAL.

          I remember now. Some people think he is an algorithm and some people think he is a real person. Dichotomy!

          Not just any old alorithm. No they probably whipped out Prolog and half the Phd’s in Irish universities to create him and then someone open sourced him let him loose when they realised he was not intelligent enough and tended to return upredictable and unexpected results after all the money the fucker cost

          That is being dimplomatic. In Irish that means he was talking shite and they had no bloody use for him. Just like e-voting machines that cost 50m and were built using ancient 6502 processors

          He does know Tam O’Shanter and that is why me and HAL get on alrighty. I rather like him but leave it to others to waste their energy arguing with a computer algo lol. That would be insanity. Mind you life if like arguing with a computer algorithm for all the bloody sense it makes

          HAL was not created with your simple Java or Php junk

          If you think about it HAL is everywhere today

          He is the doctor who won’t admit he is a drug dealer; the politician who won’t admit he is a pawn and medical professional who will tell you that water fluoridation is good for you despite the fact that 5% of Europe add this doping chemical to the water.

          That explains why Northern people are sharper. In Scotland and Northern Ireland they don’t dope the water!

          Here is a good read with anyone relaxing and navel gazing this Friday night.

          Nails In The Coffin – Part 1

  26. bonbon

    The British hand shows itself-billion bill threat as efforts to solve bank bailouts intensify
    THE State could face compensation claims from out-of-pocket bondholders following reports that former subordinated bondholders in Bank of Ireland and Allied Irish Banks are seeking compensation for being forced to take massive losses on bonds they held.

    A group of Bank of Ireland bondholders is now in discussions with the bank.

    “A standstill agreement has been reached between Bank of Ireland and the bondholders to allow them to talk and reach a settlement. This agreement is indefinite,” Reuters news wire said, quoting a legal source.

    A spokeswoman for the bank declined to comment last night.

    The group has also lodged letters with the Department of Finance, alongside a number of bondholders in Allied Irish, the report said. Allied Irish also declined to comment.

    The moves by the bondholders could force banks to beg the State for fresh cash or prolong the losses posted by AIB, which effectively belongs to the State, and Bank of Ireland, which is part-owned by taxpayers.

    The moves follow a UK court ruling in July that found a ‘burden sharing’ deal by the former Anglo Irish Bank that forced losses of around €1.6bn on some lenders to banks to be unlawful.

    The IBRC is appealing the ruling. Most disputes about bonds issued in Ireland are subject to English law and are heard in the courts there. The case is expected to be heard in March.

    If Anglo’s appeal fails, it will leave state-backed banks having to reinstate the huge debt burden, just as efforts to draw a final line under the bank bailouts intensify.

  27. Dorothy Jones
    Judgement on challenge tomorrow at 8:30am Irish time

    Little or no media coverage? Only Thomas Pringle; Tale of Two Treaties and NAMA Wine Lake.

    • Dorothy Jones

      Sorry; re. legality of ESM

    • As expected, the ESM was declared lawful by the ECJ. One shall be forgiven to be remembered to the enabling act, another cornerstone of a “lawful” act in European history by the wigged class of honorable men and women.

      It is this Faustian pact between states and banks against the people of our nations that finds it utmost expression in the legal framework of the ESM to date.

      A pact that most are unwilling to recognise as such, treason.

      • Georg I repeat what we are witnessing is fascism. Just that no-one will say it. Compare and contrast what is happening with ideas such as direct democracy

        People throughout history have perished because they acted like sheep suffering fron Normalcy Bias:

        History Speaks – Will America Listen? (Part Two)

        • Adding facts that can be poven and connecting the dots is useful.

          Juergen Fitchen, now number 2 in Deustche Bank, who was at the Trilateral Commission Meeting in Dublin in 2010 now heads the BdB, Bundesverband Deutscher Banken, the largest german Banking Lobby Group.

          The BdB strictly rejects the splitting up of retail and investment banking. Further they demand the delay of Basel III.

          It is this revolving door mechansim that allows private interests to extort public assets and to dictate laws – quite literally – with a public too busy to consume.

        • StephenKenny

          The difficulty with fascism is a useful definition. Consider the last 15 years:

          - Previously illegal invasions of countries have become not just normal, but widely supported. The reasons generally given, surprisingly reinforce this disappearance of any observance of international laws and treaties.

          - It is now routine to ban demonstations and street protests.

          - The use of vague ‘anti-terrorism’ laws to arrest anyone, on any, or no, charges, is now accepted.

          - Radio, television, and newspapers are no longer viewed as champions of the people, and scrutinisers of those that would do them harm – the corporate and political establishments (Watergate, Pentagon Papers etc). WIthout exception, the western media are simply part of the those they should be taking to task.

          - The public sector, political, and corporate establishments are completely intertwined. It’s difficult to describe this as the assumptions such as that regulators regulate, and law enforcement enforces the law, are no longer valid in the corporate, political, and financial sectors. Talking about his, Ive found that the general response is just to shrug and say something like “I expect it’s very difficult”.

          These are features of a fascist state. It’s fascinating.

          • bonbon

            The ESM is an Enabling Act – Ermächtigungsgesetz, based on Hitler’s stunt. This time around there is no EU Constitution to disable, rather all the national sovereigns (what remains of them) aided and abetted by willing collaborators. The attempt to write the laws to avoid a future Nürnberg Tribunal just proves the point.

            Hitler needed the Reichstatgsbrandt, blamed on a lone anarchist when the SA actually carried it out, to put in place such laws. Are the ESM crowd making and using Greece for this purpose?

            That is fascism- shock and emergency makes the law as Hitler’s Crown jurist Carl Schmitt, that “theorist”, quoted by judges all around, declared. There is the definition.

            The ESM is Schmittlerian!

            “Illegal invasions”, aggressive war was declared at Nürnberg as a crime against humanity. Mr BLair’s Doctrine of “regime change” is exactly this – the “post Westphalian” epoch so often touted. The British Empire is showing its true colors as their system implodes.

          • Whistling sound on december afternoon winds ring aural imaginings though stark black branches as the evening comes down and lonely down. We are lonely when evening comes down but not as lonely as the sound of old Sunday Morning Coming Down. Thank god I never hear your name on Sunday David. You are a depressing little bugger

            This is a vacuum cold as ice where a minuscule minority spends time whispering to strangers to no avail. If you are friends with anyone on this site then please keep it to your selves. No one wants to know. People will not speak up if they think this is a social club with a whiff of the insider mentality and the old palsy walsy act. Just my opinion but I think it’s better keeping personal friendships to ourselves. Now tell me to piss off and stop being an arse

            We care and come here to this snug to seek empathy, acceptance or rejection. We feel alone and we are afraid. I am afraid but I am not afraid. I am afraid I might grow old and regret having done nothing but I am not afraid to face down these people in the morning

            Friends and strangers come and go in life just like the colours and moods of the west wind. The ghosts are always there reminding us of the shame of the past and we owe them. We need to make the diaspora proud and that will take decades

            Let’s reclaim the past and do it our way. Whatever that way may be

            It’s philosophical but it is better being philosophical than rotting in apathy or dying early through anger and rage. The bastards are not worth it

            Lets march in dignity and kill the bastards with silence. There is no need for rage. When the worlds media report 50,000 in the streets of Dublin holding a sit down candle lit protest and offering their shirt to the dail things will change fast. Very fast!

            We don’t need leadership. All we need is to make sure that 50,000 people are motivated to turn up

          • Tony Brogan

            Stephen, you are dead right. People are sleepwalking into a complete loss of liberty.
            Some are in absolute denial even while being shepherded along the path to their own annihilation

      • Dorothy Jones

        Interesting piece on EU lawblog on the ESM Decision by the Eopean Court of Justice:

  28. Wisconsin

    Hello, David, from Mt. Horeb, Wisconsin, USA. It is time to rejoin you. Your two-tier Ireland article applies also to the Heartland of the USA, the Midwest. As you may know, in the 1920′s Ireland looked to Wisconsin for models – for example, the Shannon hydroelectric infrastructure follows the model of our hydroelectric dams on the Wisconsin River here. In short, Wisconsin shares the same characteristics as Ireland, which is one reason why I have felt very much at home there. We are rural; Ireland is rural. Both of us have industrial hubs,which get in the way of new start-ups to move us into the twenty-first century. As in Ireland, we continue to invest in yesterday, not the future. I have great faith, confidence in the Irish people to surmount current challenges. They have in the past. They will now, and they will in the future. I really need to visit the Emerald Isle again. It has been too long (1968). I have no Irish family heritage; in effect, I am an Irish “convert.” Thank you for clarifying issues, situations for the Irish people, and their friends. Paul Rux, Ph.D. (University of Wisconsin – Madison), special one-year student at Trinity College Dublin, 1964-65. The late Dr. David Andrew Thornley was my mentor during my time at TCD. It was one of the greatest learning experiences of my life. Ireland will win again.

    • bonbon

      Lincoln County Wisconsin Board of Supervisors Pass Resolution in Support of HR1489 (Glass-Steagall)

      On September 20, 2011 the Lincoln County Wisconsin Board of Supervisors passed a resolution in support of HR1489. The board further resolved that copies of this resolution be sent to the President of the United States, the Wisconsin U.S. Senators and Representatives, the Governor of Wisconsin, Lincoln County State Senate and Assembly Representatives, all Wisconsin Counties and the Wisconsin Counties Association.

      And :

      Wisconsin Farmers Union Supports Glass Steagall

      That is in spite of Gov. Scott Walker’s notorious “demonizing workers as the cause of the economic collapse that we know came from Wall Street and the shipping of jobs overseas..”. There was practically a mass strike there last year. Apparently he beat Recall.

  29. Philip

    Saw a marvellous article this morning on BBC website…
    “The Centre for the Study of Existential Risk (CSER) will study dangers posed by biotechnology, artificial life, nanotechnology and climate change.”

    It goes on…
    “that as robots and computers become smarter than humans, we could find ourselves at the mercy of “machines that are not malicious, but machines whose interests don’t include us”

    The last sentence says it all
    “machines that are not malicious, but machines whose interests don’t include us”

    Substitute Bureaucracy/ Monopoly/ Banks/ Vested Interests/ you name it for “machines”

    It’s all about being center stage. And if you are wait for the ECJ or our spineless leaders or whoever to make any difference, you will always be in the bottom tier.

  30. Praetorian

    Interesting one from the Guardian (yet again)!!

    “In their new book, Economists and the Powerful, Norbert Häring and Niall Douglas trace how the most powerful of all the social sciences became a doctrine for helping the rich — with the aid of huge sums from business. You may be familiar with a version of this critique, thanks to the film Inside Job, which described how some of the best-known economists practising today are in the pay of Wall Street. But the history unearthed by Häring and Douglas is far more disturbing — because they argue that vested interests have slanted some of economics’ most fundamental ideas.”

  31. Trying to learn how to walk like heroes we thought we had to be
    And after all this time to find we’re just like all the rest
    Stranded in the park and forced to confess
    To hiding on the backstreets, hiding on the backstreets

  32. Peter Atkinson

    Further to an earlier post I made, I would like to draw your attention to a map drawn up with agreement of world authorities carving up the planet beneath the sea.You can read up on the particulars yourself but suffice to say that the one resource that we could have exploited with advances in modern exploration and drilling techniques has, to my knowledge, already been flogged off.

    The whole subject of underwater exploration is fascinating and again with a little googling you can learn how the big players like Rio Tinto are working their magic around the world buying up rights from countries who are broke and trying to turn a quick buck.

  33. bonbon

    We are moving toward a Europe with a Northern strategic frontier, and a Marshall Plan for the Med. Ireland will link into the Eurasian Landbridge :

    Proposed ‘Tuskar’ Sub Sea Tunnel across the UK and via the Channel Tunnel to the Continental High Speed Rail Network

  34. bonbon

    Greece’s international lenders agreed on a package of measures to reduce Greek debt by €40 billion, cutting it to 124 per cent of gross domestic product by 2020.

    In their effort to settle on a common European approach over the weekend, the ministers discussed allowing individual euro zone countries to adopt separate tailor-made measures to ease the burden on Greece without actually accepting losses.

    Plans to ease burden do not apply to Ireland

    Any arrangements to ease the burden of Greek national debt will not be applicable to Ireland, Minister for Finance Michael Noonan has said.

    So now a Two-Tier bailout?

    • Grey Fox

      Who needs LaGuarde, Rehn, Draghi etc… when we have our very own Noonan to tell us to PISS OFF!
      This is totally OBSCENE! ABSURD!

    • bonbon

      Noonan is right – the phony deal that FG touts, is a pony of an entirely different color to the phony Greek deal.

      The Phony Greek Debt Deal

      Nov. 27, 2012 (EIRNS)–The Eurogroup has announced their deal on Greek debt, which is all smoke and mirrors to cover the failure of the entire bailout policy. The only real decision was the release of EU34.4 billion which should have been released six months ago. Fully EU23.8 billion of that will be disbursed to recapitalize the Greek banks that were pushed over the top by the last haircut on Greek bonds — which in reality only affected Greek banks, insurance companies, and individual holders of the debt — at government expense. The remainder will only be paid in tranches, which will not begin until next year. The IMF will not release any money until the Eurogroup implements a scheme which is supposed to reduce Greece debt from 190% of GDP to 124% by 2020 and 110% by 2022.
      In fact, nothing will be done to actually reduce the country’s debt load. They agreed to lower the interest and extend the payments from 15 to 30 years and release EU11 billion in profits that the ECB has made on buying Greek debt at a discount. None of that money will actually go to the Greek government.
      As for any write-offs, if there are any, none will begin until 2016. The agreement supposedly will allow Greece to buy back the privately held debt at 35 cents to the euro. But most of the debt is now owned by the Eurozone governments, whose finance ministers make up the Eurogroup. The only privately held debt is that held by Greek banks which bought Greek short-term bonds during the six months that the Eurogroup was refusing to release the funds. All this is to keep up the illusion that the bailout is not a total failure.
      Eurogroup President Jean-Claude Juncker said this will put Greece into a “new paradigm.” The idea that the debt will be reduced is absurd, since the Greek economy will cease to exist. According to Greek government data, the total government debt is now EU319,620,260,429, which excludes the pending EU34billion. Every Greek man, woman, and child now owes the EC-ECB-IMF Troika EU28,260.

  35. bonbon

    Surprise appointment at BoE
    Mark Carney, governor of the Canadian central bank has been named as the new governor of the Bank of England by Chancellor George Osborne, to serve a fixed term of five years and will hold new regulatory powers over banks.

    He was a surprise choice for the head of the UK’s central bank and had previously ruled himself out.

    The post is seen as one of the most important positions in the stewardship of the UK economy.

    Current BoE governor Sir Mervyn King who steps down from the post next June warned the risk posed by the eurozone has grown.

  36. bonbon

    Bizarrely, the British government has declared itself strongly in favour of much closer euro area economic and fiscal union as necessary to avert a further worsening of Britain’s economic crisis. But such integration, Cameron will insist, cannot apply to Britain.

    There is much brave talk in London about the UK being free to pursue its “global trading mission”. But since Britain exports more to Ireland than it does to China, big business in the UK is increasingly alarmed by the direction of government policy on Europe.

  37. gizzy

    Off topic. You run a country into the ground you are given a large pension before you are 60. You lose your business in the country that has being driven onto the rocks and you face jail bankruptcy or like today suicide. It has to stop.

    • bonbon

      I would not trust any pension no matter what is promised. Just watch what Monti is doing. And anyway Glass-Steagall which will make those pension funds paper worth zilch, is the way to go. a lot of resistance to Glass-Steagall is based on this fear of worthless paper. Iceland was put on the terrorist list by Britain because of UK pension funds, and I suspect Ireland ia also bailing out such funds – let the Inter-Alpha banking group cough up and admit it if they cannot.

  38. Peter Atkinson

    I pointed out two “relevant” travesties in Ireland of the 21st century in my previous posts.Hardly a comment on either.No, keep ploughing back in history quoting economic scripture.Next thing you know someone will pop up and say the dinosaurs are to blame for the mess we are in.

    Lads and ladies I’ll leave you to it to see who can out-bullshit the other.In the meantime we are going down quicker than a lead baloon.

    • Dorothy Jones

      Peter; The potential for offshore windfarms is also a mechanism for huge potential development which has not been harnessed here. And all the while; in Germany industry struggles to keep apace with market demands for wind power production due to the lack of appetite for nuclear power. Why can’t it quite simply be put in place? Siemens could be a partner and provide certain finance. The appetite is there.

      • bonbon

        The effort by Merkel to make Germany a Green model for the world is crumbling. Blackouts in Munich (blamed on whatever) are only the start. Siemens is getting cold feet :

        Solar storm as desert plan to power Europe falters

        To suggest Ireland should now run from a housing bubble into a Greenie Bubble, is plainly incompetent. The costs of cabling, just for example, are being dumped on consumers, and Germans will see an unprecedented price hike in Jan-2013. This is purely and simple a bubble again, but this time with the danger to the very energy basis for industrial economies.

        Bubbles !

      • bonbon

        NTV and Spiegel Online report on the catastrophic German energy grid problems caused by Merkel’s insane decision, this week.

      • Tony Brogan

        Hi Dorothy
        most of the reading I have done on wind energy indicates that it requires large government subsidy to operate. It is also unreliable and there are no effective storage mechanisms.

        Do you have updated information to indicate improvement in efficiencies and reduced costs to make this an effective alternative to say nuclear power stations where there are many improved models that reduce the environmental hazards of nuclear reactors?

    • Philip

      I can guess why your comments are not getting much reaction. It’s plain hard to shift abruptly from local to global so rapidly. In addition, how does one resist these insider/ vested interest schemes when we cannot even sort out our own internal issues.

      I identify with those who say DDI or similar need more attention. This is within most people’s zone of control. For similar reasons we do need to examine central banks and the lack of local answerability – either by eliminating them as they are (Gold/ Bitcoins etc) or something else. Again…in our zone of control. There needs to be an active shunning of any institutions funded by the state which have spectacularly failed.

      When it comes to access to national resources, undersea resources, logistics etc be they mineral/ energy based – we have a capitalisation issue. Today you need outsiders or veritable monopolies to fund these exercises – bit of a hobsons choice when you realise that the original intent of these state monopolies was to protect national interests.

      So there you have it. On a grander scale, we see public to private migration making national solely answerable to corporate interests – that’s fascism. The only way to fight this is to curtail the gradual migration of public bodies to wholly national ones by insisting on a representative style that is more answerable.

  39. “It can be seen what a chasm separates ordinary workers from their leadership when the General President of the biggest union labels as ‘fascist’ working people and pensioners seething with anger at his failure and that of the rest of the official trade union leadership to mount any credible resistance to the disastrous austerity agenda.

    • bonbon

      This is the Hamlet-out character of many in powerful positions of influence.

      What infuriates people is the cancelling of the future – that unique human characteristic that no other species shares. It is actually a denial of being human.

      Rightly so infuriating!

      And Shakespeare, the Bard, warned us!

    • bonbon

      And Robert Burnes also gave a stern warning : do not stop at Kirk Alloway to listen to the music! Remember Tam O’Shanters mare!

  40. >3 million unemployed… in France!

    According to Eurostat here:

    France has surpassed the thee million mark for the first time in 16 years.

    In a recent Web interview by Union Solidarity International with Yanis Varoufakis, he also used the term treason as I did above in the context of the ESM.»+Podcast%29

    It remains to be seen for how long the pact of the political class and bankers, using the controlled media, against the people of our nations will be enough to maintain status quo.

    Today the Bundestag is asked to fast track the protracted Greek default, the 44 billion package, and of course, all the established parties have agreed already, except the left.

    • bonbon

      The phony deal that FG touts, is a pony of an entirely different color to the phony Greek deal. German press touts this as Money for the Greeks, the usual lie.

      On the “fast track”, the bailout ponies are neck and neck, with the Dail, Bundestag placing major bets!

  41. Tony Brogan

    Report from Phoenix Capital Research

    November 28, 2012

    The EU Just Lost Another Prop

    As Greece continues to distract the markets, France, the other primary prop for the EU besides Germany, is now experiencing an economic contraction on par with that of 2008-2009.

    Indeed, France’s September’s auto sales numbers were worse than those of September 2008 (the month Lehman collapsed). The country’s PMI reading is back to April 2009 levels. Even the French Central Bank, which would hold off as long as possible before unveiling bad news, has announced the country will re-enter recession before year-end.

    Over the past few weeks, an extraordinary cry of alarm has risen from chief executives who warn that the French economy has gone dangerously off track. In an interview to be published on Nov. 15 in the magazine l’Express, Chief Executive Officer Henri de Castries of financial-services group Axa (CS:FP) warns that France is rapidly losing ground, not only against Germany but against nearly all its European neighbors. “There’s a strong risk that in 2013 and 2014, we will fall behind economies such as Spain, Italy, and Britain,” de Castries says.

    On Nov. 5, veteran corporate chieftain Louis Gallois released a government-commissioned report calling for “shock treatment” to restore French competitiveness. And on Oct. 28, a group of 98 CEOs published an open letter to Hollande that said public-sector spending, which at 56 percent of gross domestic product is the highest in Europe, “is no longer supportable.” The letter was signed by the CEOs of virtually every major French company. (The few exceptions included utility Electricité de France, which is government controlled.)

    We get additional confirmation that France is in big trouble from its partner in propping up the EU, Germany.

    German Finance Minister Wolfgang Schaeuble has asked a panel of advisers to look into reform proposals for France, concerned that weakness in the euro zone’s second largest economy could come back to haunt Germany and the broader currency bloc.

    Two officials, speaking on condition of anonymity, told Reuters this week that Schaeuble asked the council of economic advisers to the German government, known as the “wise men”, to consider drafting a report on what France should do…

    “The biggest problem at the moment in the euro zone is no longer Greece, Spain or Italy, instead it is France, because it has not undertaken anything in order to truly re-establish its competitiveness, and is even heading in the opposite direction,” Feld said on Wednesday.

    “France needs labour market reforms, it is the country among euro zone countries that works the least each year, so how do you expect any results from that? Things won’t work unless more efforts are made.”

    France will be a bigger problem than Spain or Italy for the EU?!?! That is one heck of an admission from a German official. If France deteriorates then it’s game over for the EU. The current bailouts mean Germany is already on the hook for an amount equal to 30% of its GDP. If France tanks the amount will balloon astronomically. At that point it’s game over.

  42. Tony Brogan

    According to your own statement a while ago David you said you would close the blog if racist overtones continued or were used.

    Just substitute the word British for Jewish and you would have closed this blog months ago.


    • bonbon

      London coined the disgusting, now oft repeated even by their victims, PIIGS. Closing down the City’s investment banking operations, the core British Empire activity, would be more appropriate.

  43. Tony Brogan

    In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers

    • Tony Brogan

      Why McWilliams and those at Kilkenomics who said that the US was in recovery are so wrong. The above is a definition of bankrupt if I ever saw one.

  44. Tony Brogan

    Nothing a government or individual can do will stop the black swan event that will create the collapse of the financial system.
    All an individual can do it to protect themselves and their families. The best way to do that is to own gold.

  45. Tony Brogan

    Quotes of the Day

    Those of you who are FOOLISHLY in GLD and SLV will cash out with a large pile of devalued dollars and no one in their right mind will sell you their gold or silver for them. The move out of dollars will be like people fleeing a burning theatre. Only a few will get out. There will be no supply, no sellers, just a gazillion panicked buyers with a fistful of dollars that will not buy them gold or silver.

    -David Schectman, Miles Franklin

  46. Tony Brogan

    The Gold Bull continues unbounded with the Zero Percent Interest Policy (ZIRP) as its primary cylinder, while the artificial 0% distorts all financial markets, assets, and value. The Gold Bull will continue until the USGovt debt default, and USDollar retirement.

    -Jim Willie

  47. Tony Brogan

    The cost to make a 1-cent US penny is now 4.8 cents and the cost to make a 5-cent US nickel is now 16.2 cents. How embarrassing, even adding to the USGovt deficit.

    -Jim Willie

    See above the results of inflation. The minor coins will go out of circulation. it will not be long before the minimum note issued will be $10

  48. Tony Brogan

    2012 Performance YTD







  49. Tony Brogan

    Readers are well aware that PHYSICAL gold and silver are the system’s BEST assets. Sadly, most people are scared from them by MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA…

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