May 20, 2013

Back to Kamikaze capitalism

Posted in Banks · 215 comments ·
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Have we learnt nothing? The most depressing – and I mean depressing – news last week was that useless, unproductive houses in upmarket Dublin are now making well over the guide prices at auctions, at a time when useful, productive SMEs are going to the wall for want of credit and working capital. After everything we have been through, this is pathetic. It means that the same banking and property cabal that got us into this mess is flexing its dangerous muscles again.

Houses in this upper-end bracket are nothing but unproductive, useless status trophies. But worse still, if banks start funnelling what limited cash they have into the smarter end of the property market, we are goosed. At the core of lending to swanky property at a time when small businesses are starved of cash is a form of kamikaze capitalism, a get-rich-quick scheme which may favour the individual who gets in on the scam, but is detrimental for the community.

It is a kamikaze form of capitalism because it is ultimately self-destructive and unproductive. This type of asset only has value because other people put a value on it. You want it because other people want it and that’s what drives up the price. It creates no economic value, no jobs, no enterprise, no patents, no creative industry.

In fact, by stoking up the property game again in Dublin, the banks and the property sharks will again preside over a feudal system where the scarce capital of the country is sucked into the social pit of trophy houses, while working capital to small business is strangled.

Right now, the Central Bank should move to stop this so that we never, ever have a property pyramid again. It could do this by limiting the value of the collateral against which the banks can lend. When you look at all property markets, they are driven, not by supply and demand, but by excessive lending against collateral. As soon as prices rise, the ‘equity’ in the houses rises and banks feel that they have permission to lend more and more cash because they have the buffer of equity. But this only insures that yesterday’s rising prices leads to tomorrow’s increased lending.

A suggestion to stop this price/lending spiral was tabled by Israeli economist Amos Rubin. Imagine that regulators instructed lenders that the combined maximum loan amount should not exceed 70 per cent of the moving-average value of a property, offered as collateral, over the preceding 20 years.

This would wipe out any future house price nonsense at a stroke, and the socially insecure would need to find another asset through which to display their endemic inadequacies.

By preventing money going into property, we liberate that money to go into other investments, which have the potential to create jobs and opportunities for Irish talent, particularly young talent.

For years now (actually, since the publication of The Generation Game in 2007), this column has been highlighting the generational divide in Ireland – whereby young people have been disproportionately penalised and the middle-aged and the old have been favoured.

Last week, the ESRI – a bastion, ironically, of the middle aged, feather-bedded economist – finally agreed with a note that said the under-45s were being hammered, while the over-45s were doing OK. Better late than never, I suppose.

Ireland needs jobs for young people because we know that unemployment at a young age has a permanent impact on people’s prospects throughout their life. The warning sign for a recession that penalises the young over the old comes from Japan.

There, we see the phenomenon of the ‘freeter’. Freeters are young people who are either freelancing or working way below their education level, living a hand-to-mouth existence. Real jobs have been replaced by temporary, badly-paid jobs. Since the 1990s recession, millions of young Japanese workers have been finding themselves in this position.

In 1992, 80 per cent of young Japanese workers were in regular jobs. By 2006, over half were temp workers in one form or another. This remains the case today and scarily, the Japanese economy of 2013 is actually smaller than the same economy in 1992.

In Japan’s depressed system, there is no clear path to prosperity for young people. They have only two choices: stay and take whatever subsistence-level job they can find or leave and take their chances elsewhere.

Now, look at Ireland today. As of 2010, Ireland’s temp work rate was 22.4 per cent of the total, and this is rising and concentrated in the younger age group. Probably the most damaging statistic is that our young population is actually dropping.

In the 2008 census, the Irish population between the ages of 15-24 was 669,200. In 2012, it had fallen to 553,500. In 2008, the population between 25-29 was 408,300. In 2012, it had fallen to 341,200.

In 2011, the total population between the ages of 25-44 was 1.405 million. It was 1.4335 million in 2012 – a small drop. We know that migration is on the rise. Emigration rose from 80,600 in April 2011 to 87,100 by April 2012 – of which 46,500 were Irish nationals: your brother, sisters, sons and daughters. The highest proportion was aged between 25-44.

Japan shows us that these trends don’t reverse themselves on their own. In Japan, we can see the future for young Ireland. Many of these young people are also trapped in mortgages and/or in arrears – meaning they can’t up and leave, but are finding themselves in ever more frightening domestic circumstances, which have obvious social and economic knock-on consequences for the country as a whole.

The eclipse of the young by the middle-aged means we have not only a lost generation, but such a dangerous process could set off a cycle of national decline.

How do you reverse it? Well, the first thing we know from the US is that most jobs are now being created by young, small companies. In fact, old big companies are net job destroyers. So, at the very least, giving small businesses credit should be the number one priority for government and the state’s industrial banking complex.

The last thing we should be doing is championing trophy house sales to the middle-aged when the future of a generation is at stake.

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    • Adam Byrne

      Subscribe. If there was a way whereby, if a person has already been subscribed to new articles, that they could also be subscribed to the comments (or not be subscribed, as the case may be) then we wouldn’t have to do this!

      • Lius

        Adam,

        You are unhappy that you are loosing your ranking as first up, first dressed.

        • Adam Byrne

          Haha nah, happy I am finished my three years as an undergrad and don’t have to get up so early!

          • petrapig

            Yawn , this was getting old lonnng agoooo….

            Great article DMCW –

            your right as usual -weep…
            What will we do? .. just keep subscribing forever till we are left eating bread and water by the powers that be? Looks like it …Cowards

      • Adam, there is an RSS feed for the comments on each article. You have to subscribe to each feed as the articles are published. Just open the comments and paste the URL in your address bar in to your favourite RSS reader. I’ve done that in the past and it certainly beats having 100 emails in my inbox. YMMV

        -L

  1. Puschkin the Black and White Cat

    Property , shame on it , I hearby curse it !!! Anyone who reads the comments at this site (a good interesting read, I’d say), knows my views on PROPERTY. It’s just salvery re-branded.

  2. fred

    Surely we must introduce a link between the property and the mortgage. Pay the mortgage or return the property to the the bank without leaving any debt overhang. Perhaps this would prevent reckless lending from the banks and another property bubble. Banks would have to look at generating profit from the SMEs.

    • Tony

      This was exactly what I was going to say. Non-recourse mortgages would certainly help to focus the mind of the lender, for a few years anyway, until they had forgotten the mess they’d created. A genuine risk to the bank makes it a different proposition for them. No more hyped up valuations and fewer equity release products for sale would lead to less silly property lending. They’d have little choice but to lend to small businesses.
      Of course the real issue is the absence of talent. Do the banks actually have the people anymore who can assess a business plan, and make a decision on the merits of the proposal or the capabilities of the proposer? It seems to me that their talents may be reduced to reading a property valuation from the “approved” estate agent.

      • Eireannach

        Non-recourse mortgages are essential, if we are to stop reckless lending by banks.

        I don’t know how to stop reckless borrowing, other than to critique to mindset that seeks wealth lazily, by watching the magic money tree of equity ‘grow’ (until is shrinks!).

        We desperately need to think rigourously about productive ways of making money, producing products and services of value to the future of humankind, rather than this lazy route to wealth, where you bricks and mortar do the work for you, like a slave. That slavery mentality can easily pivot around, where the house becomes the master and the mortgagee the slave.

    • petrapig

      Banks make the rules so non recourse is never going to happen .. They rule us all. Politicians are expensive shop fronters for the money laundry business of bankers.

  3. mikmax54

    As the old adage goes, the more you’ve got, the more you get. The Government is complicit in this because they get a windfall benefit from every house sale, the higher the prices the more their coffers are filled. So we can’t expect them to step up and address the issue, it isn’t in their immediate short term interest – and it appears that governments are increasingly taking short term perspectives rather than planning for future generations. Probably because most of the politicians are in the 45+ bracket that benefit from all this, and their retirement plans hinge on a sustained inflation in the property market.

    • fred

      I know you are right mikmax. An inflated property market suits a lot. But how do we get them to address it? If it isn’t addressed now, then we are bound to repeat this mess some time in the future. We need to reform of the banking sector while we (the people and government) have some control.

      • Tony

        They won’t address it because they don’t have to. As long as politicians are elected based on their membership of a political party, or because they got a footpath fixed in 1992, or because their father had the job once, nothing will ever change because the politician knows that his seat is safe.
        If the people wake up and vote for the candidate based on ability and performance, instead of voting for the new community centre, the aforementioned footpath, the ramps to slow down the speeders, or the fact that the candidates great grandfather was on the “right side” during the civil war, there might be some change. If a politician fears for his seat, he’ll be forced to perform for his constituents.
        But that also requires massive reform of the political system. More power at local level, a list system for the Dáil, with the absolute abolition of the whip to reduce the power of the executive, and a properly elected and beefed up senate with real veto and legislative power are the keys to real change. Add to that the removal of “politicians redundancy payments” (you take your chances), and ridiculous allowable expenses, and candidates will emerge who have more than their own bank accounts at heart.

        But alas, it seems the canny politicians are doing the exact opposite, centralising their power and reducing democracy. Ah well … I guess these turkeys aren’t voting Christmas.

    • Patrick

      We have to stop saying” The Government” and “they”. It is “Our Government” and “We” the people voted for them. Things will not change until “We” the voters take responsibility for our actions and our government.
      We have voted for our TD’s, our President, nobody came from space to impose them. We will be better off when We decide to make use of own skills, education and natural resources. We have as Much as any other nation. Remember when we find our selves in a “hole” we have to stop digging, find the ladder and climb out..

      • hibernian56

        Actually, I didn’t vote for most of them.
        I certainly didn’t vote for the poetry reading hobbit.

        • Tony

          LOL. An Australian friend told me he was surprised that we had actually elected a real leprechaun as our president.

          • Colin

            Not only that, but he has a record of being proved wrong on almost everything he’s talked about.

    • Reality Check

      +1.

  4. Blood is Thicker than Water

    Original word usage determines its purpose and nothing will change that . The word ‘Bank’as used in its ancient form came from ‘Wolof’ in West Africa .

    It means ‘ to bend’.

    So banksters are benders and will always abuse the social fabric of the community .

    Its time to outlaw the word ‘Bank’.

  5. pauloriain

    Yes and why are these fools bidding up the price of property. It’s not just because of insecurity.
    David you need to get your analysis around the double income household as opposed to the single income household vis a vis the property stupidity.

    It is good to see the focus here on property in the context of competitiveness. Our western economies need to get our heads around how, structurally, we will continue to compete in an increasingly globalised world when we insist on playing the property ponzi construct game.

  6. woodsey

    What exactly are you relying on for the statement that ‘news last week was that useless, unproductive houses in upmarket Dublin are now making well over the guide prices at auctions’?

  7. Bamboo

    David, in all the years that I’ve read your articles, this must be one of your most clear, true and best articulated post. It is crucial to understand this article correctly and not read anything in between the lines.

    It is a truly a sad development that our society is falling into “get-rich-quick schemes “again. And so soon after the first fall. I was expecting at least one generation pass by before it will flare up again.

    I guess there was some hope that our society was clearing out the cobwebs of our brains. This development is clearly putting a damper in everything.

    Thank you for highlighting this again.

    • Reality Check

      +1. The article ought to be nailed “Luther style” to the gates of Leinster house.

      • bonbon

        Luther did indeed split the Church. Only problem he divided the corruption in two, not really a great achievement, what?

        Instead, in an epoch of separation of Church and State, separate speculation from commercial banking.

        Luther followed Sarpi, a Venetian banker’s agent, leaving Venice untouched. Today the New Venice , the City of London, is at it again.

  8. molly

    Banks will run with this because they are not using there own money.
    When there play money is running out the very people who played no part in this madness will be forced to cough up,with there savings like a thief in the night.

  9. pauloriain

    It’s all to do with the social construct, which manifests itself more so in South County Dublin, but exists thru’ out the country. It revolves around the professional classes and how they see themselves and their worth. Still we see the professionals continue to be overpaid and is not confined to just doctors, solicitors, accountants… the professional classes are wider than that. Along with their professional position must come the house, it’s location etc. This is a big debate, which needs to happen fast.
    You can’t live a rewarding life Ireland unless you have position, you are quietly pitied, you have to buy into the construct, to belong or you make the others wary.

  10. Adam Byrne

    They’ll keep on doing the same shit over and over again and things will never change until Leinster House is burned to the ground with everyone in it.

    Mirroring Japan, the next thing you’ll be hearing suggested is multi-generational mortgages.

    This is the land of the incompetent and corrupt and they hide in plain view because they know their will never be any consequences for them – negative effects get passed onto the ‘normal’ citizen in a perpetual fashion.

    It’s yet another version of “Only the little people pay taxes”.

    Sure doesn’t everyone love the Irish? Ole, Ole, Ole, Ole.

    #Paddywhackery

  11. Pat Flannery

    I like the idea of “smoothing” as possibly applied to mortgage lending. It is widely used by actuaries e.g. in pension schemes. It forces the long view and prevents (by smoothing out) short-term swings.
    Wherever used it reduces “gaming” of the numbers for short-term artificial gain, which is essentially the “game” into which modern Irish banking has degenerated.

    Of all the things you have suggested here while I have been following you, this has the most potential. At the risk of becoming another bonbon with Glass-Steagall perhaps you should restate this idea as often as you can. After all even John the Baptist became a pain in the neck up and down Galilee but he influenced Jesus and without “John the Pain” there probably would be no Christianity. (On second thoughts that is probably a bad analogy.)

    The other big thing that is often forgotten here in Ireland is the permanency of an Irish mortgage as a PERSONAL loan. That is an enslaving concept. In the United States mortgages are by law real estate. They are derivatives and only as valuable as the asset that secures them. That has far-reaching consequences.

    In the U.S. banks are forced to foreclose and move on. In Ireland banks have become feudal lords with young borrowers as their serfs.

    If you want to write a charter for freeing the youth of Ireland, start with the above two concepts.

    • bonbon

      High time you mentioned derivatives, the real problem. Mortgage based Securities, derivatives is what broke the dam in the US. Foreclosures were stopped because no-one could even find who owned the derivative! Repackaging and trading is the name of that snowball game.

      But as we all know now the only way to clear up this is to render all derivative IOU’s null, or as Glass-Steagall does, without any recourse to FDIC or bail in/out, which is the same.

      Banks expected to change with bible-thumping? Come on! FDR must have found that idea funny, while signing the 100 days executive orders. Since you brought up religion, we need a new testament for banking! The old testament is kamikazi (to paraphrase DMcW).

      • michaelcoughlan

        Hi,

        Isn’t it interesting that FDR confiscated everones gold in the land of the free as part of his policies. It appears Mr Hamilton also thought that using silver coins as money was a good idea at the time of the foundation of the Republic.

        http://www.usgoldbureau.com/news/alexander-hamilton-and-history-us-mint

        • bonbon

          FDR broke the “free” of WallStreet. The Pecora Commission, starting with J.P. Morgan himself, showed the public just what a criminal gang had caused 1929. We will do it again, and they know it. That is what GS means.

          Hamilton’s Credit Clause of the US Constitution is the key to reconstruction. Applied only a few times with success. The monetary tokens “in themselves” do not produce anything. The Credit System versus Speculation: Nicholas Biddle and the Second Bank of the United States shows this in action.

          • michaelcoughlan

            “The monetary tokens “in themselves” do not produce anything”

            I know this and have repeatedly stated that the real wealth lies in the skill and creative intelligence of the person themselves.

            The monetary tokens however acting as a store of value allow for the individual to retain ownership of the wealth they have created at arms length from the same collection of scumbags we both have identified as the same common enemy.

            No policy of anykind even glass stegal will work unless the ordinary
            citizen is empowered in this manner.

          • bonbon

            Friedrich List, here, shows the failure of the Adam Smith dogma :

            “Smith’s negation of productive forces leads to his ignoring “the causes of its rise and fall in a nation.” Smith therefore also pays no attention to “the true effect of the different component parts of productive power.” Without any differentiation, Smith calls the “existing stock of matter” by the “general name of capital,” and to this he attributes a downright “omnipotent effect.” Smith refuses to consider, that “the productiveness of this capital depends upon the means afforded by nature, and upon the intellectual and social conditions of a nation.”

            Today, the bail-in, outright robbery, can only be stopped by relieving the banks of derivative burder – Glass-Steagall. The ordinary citizen can then use banks for productive credit.

  12. Deco

    David is telling us something that badly, desperately needs to be said. Especially in the context of Australia now heading for a crash, as a result of Australia doing the one thing that Australia is spectacularly good at doing – mismanaging the good times, so that they are completely skint for the bad times. (kind of like us really). As a result, there will be returning Irish coming back onto the labour market.

    I did not follow the auction. But, a cursory look at daft.ie (well named indeed considering what happened) at the suburban Dublin real estate valuations, indicates that real estate valuations in some sectors are STILL excessive.

    The fact is that the PAYE taxpayer funded banks are focussing whatever money they have for loans on the Dublin real estate market. If you want to buy a house outside a 40 mile radius of D1/D2, south Cork, or Galway, then you need to save, and save really hard. And this is what is going on. The result of this is that consumer spending in Dublin might stay up, but in the rest of the country is just going downwards and downwards. Of course there will be long term effects to this, that nobody sees just yet.

    And why are the banks doing this ? Well, I reckon it is the clearest indication yet that the Irish establishment still believes in Ponzi economics. They still believe in the “affluence effect”. Despite the hiding that they have been through, or maybe as a result of the ease at which they were bailed out with the peoples taxes, they still continue to cling to outdate notions of wealth. By outdated, I mean belong to the era of the Hanoverian Kings.

    The entire social more system is still infected with the false promises of the binge era, and the obsession with veneer level projections of gradiosity. The exact intellectual diseases, that cause this mess, are still safely living in the heads of people in the suburban belt, and indeed beyond. Our whole value system in the last twenty years has become absurd, to the point that we are not actually a money obsessed society, at the top any more, as much as a pretence obsessed society. We have reached a point, that I would call “peak consumerism”, and gone beyond it. Those who try to imagine that the Bertie Binge years will return are missing the point. The binge years were unsustainable in the medium term, and by existing to the excesses to which they did – they ensured a miserable future.

    Resources are still being misallocated. ECB interest rate policy ensures that it occurs. ECB interest rate policy is subsidising speculation, and it is also subsidising investment – regardless of the quality of each. In fact if interest rates were higher, the quality of decision making in investment would improve dramatically.

    We have now reached the point where the ECB, is in the business of subsidising intelectual underperformance (or to use a more direct term, stupidity). In addition to the fact that the EU Commission is decreeing a policy of “no bondholder left behind”.

    Anybody who thinks that a continentwide policy monopoly is a great idea should think again. In this particular case, it is leading Europe into the financial abyss. Stupidity becomes the standard. Even more concerning, the level of debate in many European countries is abysmal, especially those that have long habits of being at the receiving end of EU grants. Not purely by coincidence. For these are exactly where we should expect the greatest compromises with honesty.

    • Eireannach

      Don’t worry Deco, your wish is coming true.

      UK will have it’s in-out referendum before end 2017, and the ‘outs’ will have it.

      Ireland will be 26 counties in the EU, 6 outside.

      Pressure will grow in Ireland for an in-out referendum, once the UK are outside and everyone sees that it wasn’t the end of the world for the UK.

      Ireland will have it’s in-out referendum 2 years after the UK, and we’ll be out of the EU too.

      This prediction is not far-fetched, when you consider that the UK is as good as outside the EU already.

      A new European order of regional integration, with the EU Parliament and Commission remaining as an umbrella organization like a European UN, is now inevitable.

      Expect the Scandinavians to consider forming a union after the Brexit.

    • bonbon

      Have you noticed the bail-in? Savings will be confiscated, openly and clearly stated now after testing the water with Cyprus. Tell the savers that. Anyone who believes €100,000 is “safe” has a major shock coming.

      This is the provocation that changes attitude!

      Could it be that banks are wink-winking to customers that unless they buy houses, they will take the money anyway? Is this driving DMcW’s kamikaze’s? I’ll wager it is.

      • Deco

        It goes like this.

        The well connected, always get their money out in time. They have multiple accounts and in multiple jurisdictions.

        The plebs who are suspicious of the racket being rigged against them, save. And the system is designed to keep down their wages, to tax whatever they then earn, to drive up the cost of living, so that they cannot save.

        And if, like the salmon going to the spawning ground, they then make it – they endure another cut. Inflation.

        And finally, when there is no inflation – the bailin.

        Leonard Cohen’s song about the game being rigged comes to mind.

        • moneydoesnotmatter

          Everybody knows that the dice are loaded
          Everybody rolls with their fingers crossed
          Everybody knows that the war is over
          Everybody knows the good guys lost
          Everybody knows the fight was fixed
          The poor stay poor, the rich get rich
          That’s how it goes
          Everybody knows
          Everybody knows that the boat is leaking
          Everybody knows that the captain lied
          Everybody got this broken feeling
          Like their father or their dog just died

          Everybody talking to their pockets
          Everybody wants a box of chocolates
          And a long stem rose
          Everybody knows

          Everybody knows that you love me baby
          Everybody knows that you really do
          Everybody knows that you’ve been faithful
          Ah give or take a night or two
          Everybody knows you’ve been discreet
          But there were so many people you just had to meet
          Without your clothes
          And everybody knows

          Everybody knows, everybody knows
          That’s how it goes
          Everybody knows

          Everybody knows, everybody knows
          That’s how it goes
          Everybody knows

          And everybody knows that it’s now or never
          Everybody knows that it’s me or you
          And everybody knows that you live forever
          Ah when you’ve done a line or two
          Everybody knows the deal is rotten
          Old Black Joe’s still pickin’ cotton
          For your ribbons and bows
          And everybody knows

          And everybody knows that the Plague is coming
          Everybody knows that it’s moving fast
          Everybody knows that the naked man and woman
          Are just a shining artifact of the past
          Everybody knows the scene is dead
          But there’s gonna be a meter on your bed
          That will disclose
          What everybody knows

          And everybody knows that you’re in trouble
          Everybody knows what you’ve been through
          From the bloody cross on top of Calvary
          To the beach of Malibu
          Everybody knows it’s coming apart
          Take one last look at this Sacred Heart
          Before it blows
          And everybody knows

          Everybody knows, everybody knows
          That’s how it goes
          Everybody knows

          Oh everybody knows, everybody knows
          That’s how it goes
          Everybody knows

          Everybody knows

    • Colin

      There are too many eejits in Ireland. Eejitry is low self esteem / large ego combination. Eejits believe in Ponzism. Be wary of eejits , especially the eejit in the suit.

  13. hibernian56

    As a person who has tried to start up several ventures over the years, with moderate success I can say it’s not easy. The system is geared that way.

    In the US, as David pointed out they get it.

    They grasp the fact that start ups have more potential to grow, established business on the other hand has the potential to either stagnate, or once the inevitable happens, (the arrival of the “suits” aka accountants), the process of downsizing, out sourcing, rationalisation, and any other number of soft terms the bean counters put on destroying livelihoods in the search for profits and bonus’.

    I have spent the last several years being a “freeter”, I knew there must be a term for it. I actually don’t mind this, it’s giving me vital funds to allow me to start up two business ventures. Both based on a patents. Yes patents, another over priced monopoly.

    At the end of the day the likes of Enterprise Ireland et al have no interest in the risk associated with a start up, they will sit on a fence and let you get the initial funding, which they will promise to match (eventually), but all the while waste huge amounts of your time and resources chasing the dream of state funding.

    Anyone heard of a business mentor with no business experience? I have, and met a few retired “lifers” from EI who have now set themselves up in the lucrative business of being “allocated” mentors.

    To be honest, I usually advise people to avoid EI until they have a reasonable chance of getting private equity, otherwise, as I have witnessed, the promoter tends to get swept up by EI and their flash terms like innovation vouchers (€5k which must be spent on an approved partner, not on things like salaries, expenses etc.), feasibility report (an ex EI member will prepare a feasibility report on your business, EI will pay them directly) etc, etc, etc. EI are bloated, broken and full of ego maniacs.

    The red tape is laughable, the lack of credit is criminal, the rhetoric is everywhere.

    I wonder, if I were anywhere else in the world how difficult this would be?

    It would be interesting to hear David’s point of view on our state’s broken mechanism to nurture start ups. Anyway, back to my coffee, we are meeting some private investors this week, so I have a lot of work to do.

    p.s. EI = Entrenched Incompetence.

    • Deco

      EI exist for political purposes. They are a state bureacracy. They include some bright people. And some morons also.

      However, they have never stood up and said things like….electricity in Ireland is expensive, or public transport is badly organized, or employees are harder to find in consideration of child care organization in Ireland, or there is an income deficit in the West or Ireland’s love affair with alcohol costs us jobs.

  14. Deco

    Young people who do manage to scrape and save will be the nemesis of the Irish establishment some day. Though the social mores are designed that they will not get to that point.

  15. michaelcoughlan

    Last weeks article was a superb offering. Watershed stuff. This one is too one dimensioned and typical of your hatred (sincerely felt in your case) of the allocation of capital to housing. Let me explain.

    The most obvious omission is you haven’t differentiated between existing stock (newly built or centuries old) with housing to be built or under construction. Houses that have to be designed and built need a whole plethora of creative kill and application to bring them from vision to reality.

    A simple way to stop the type of price spiralling you correctly point out and given the fact that the banks are run by such morons would be to tax speculative profits at 80% for profits gained from buying and selling houses or land which had no value added to them by the purchaser or were not rented out for at least say a three year period.

    I am trying to start a small business and it’s not credit what I need but two more important things altogether. 1) a willing customer with money in his pocket. 2) a lower cost base both of which are in very short supply in Ireland.

    I have come to the conclusion long ago that the only person who is going to prevent me at 41 years old from becoming one if the lost generation is me. Therefore I don’t approach life with the expectation the government is going to do anything for me because it in fact keeps getting in my way.

    Its a real pity that all the third level education those Japanese people received and our kids in Ireland brainwashed them into a dependency mindset ie if I do x and y a company will give me a job. That ain’t so. Each person now has to create their own job which requires the individual to be self reliant and have character something our kids won’t develop on their playstations.

    • Bamboo

      Well said.

      I think Japan and Ireland are totally separate entities. Japanese culture and society is so globally unique that we shouldn’t really draw any comparisons whatsoever.

      • bonbon

        Austrian Schooler’s are flat-earthers – all cultures are irrelevant, only metal has meaning.

        People try to talk about Japan, failing to understand universal principles of economics, see very similar trends and wildly grope for some shadow to “explain” them. Physical economics, well understood by factions in Japan, and believe it or not here too, is opposed to speculative monetarism there and here too. Monetarists are global, the real meaning of the globally extended British Empire, here, and there too.

    • bonbon

      That’s the game in Hartz 4 Germany, the Ich A.G., Me Ltd. Guess how many of these applied for bankruptcy? And since it gets them off the unemployment lists, bankrupt, sure it looks great in gov’t stats.

      This is pure Hayek as Government policy. The utter perversity of British subject Hayek’s “Road to Serfdom” is now there for all to see. A feudal regressive.

      At the U.S.E, the youth, with up to 60% unemployment, are being told just what you said, by those bailing- in the system and Euro. Do you realize what you are saying, at all?

  16. Deco

    David – an interesting topic, might be the current valuation of the ISEQ.

    It is currently at 25% it standing 12 months ago. There are stock market bubbles all over the place. Some members have P/E ratios that are creeping upward, and might be vulnerable.

  17. Figlen

    Another depressing but necessary article. I am not a financial person, but I’ve always liked the idea of the you-cut-and-i-pick style of fair mortgage lending, whereby the lendee can simply return ownership of the house to the bank if they are no longer able to make repayments. As suggested above it seems to me that this would ensure that the banks would lend a little more carefully, to say the least.

  18. Pat Flannery

    But how do we translate the many good ideas that emerge here into political action? The “news” is dominated by the eternal abortion debate and Wallace/Shatter school playground style wrangles.

    • Bamboo

      By education I think.

      Free night classes in thinking skills and common sense. Then we don’t really need a political movement at all. People will then realize it is a matter of intelligence and common sense.

      • bonbon

        Franklin D. Roosevelt, a rich playboy, caught polio. Hospitalization “forced” him to read, and he discovered his granpa Isaac. The man that recovered was not anymore the same. He acted in his “100 days” at such a pace that he must have thought it well through beforehand. He turned the US around.

        Irish classes must include Matthew and Henry Carey’s economics, Arthur Griffith’s widely published excerpts of Friedrich List’s point-by-point take-down of the British imperial economics. All of this is in no Irish school or Uni that I know of.

        It should be common sense that this means political economics.

    • bonbon

      Ask how Senator Harkin Introduced S. 985 To Reinstate Glass-Steagall.

      The US must take the lead, again. Europe, as Columbus and De Cusa knew has still not freed itself of the cult of money, Rome.

      I am fully aware of the US cult of money too. Yet I am fully aware of Treasury sec. Hamilton’s Credit clause and what it means.

      Splitting the banks will produce honest bankers. We have a huge reconstruction ahead of us, the real action to be taken.

    • Eireannach

      Pat,

      The truth is that politics doesn’t happen in the exterior, objective world ‘out there’.

      Instead, it happens in the internal psychological space of the minds of the people.

      Politicians understand this Freudian, psycho-analytic reality of politics.

      The public are less aware that all political statements, PR spin, statements, promises, etc. operate only, ONLY, ONLY, ONLY on the psychological plane.

      To give one example, Michael Noonan knows that it sounds good, it is psychologically satisfying, it sounds like improvement and advancement to say we are ‘exiting the bailout’.

      His policy, his statements, are all based on how this expression in English – ‘Exiting the bailout programme’ – appeals to the psychology of the public.

      It has NOTHING, NOTHING AT ALL to do with whether this is a good idea or not, advisable for Ireland or not, etc.

      But Noonan knows that FG TDs will be re-elected if they ‘exit the bailout’ because the public believes, rightly or wrongly, that this is ‘progress’.

      It’s all psychology. Politicians already understand this, and they control the public mind because the public think politics is something happening in objective reality.

      It’s not about the policies, it’s about perception of the policies, and voter behaviour.

      ONLY!!!!

      • bonbon

        Are you saying there is no reality, no universal principle of economics?

        FG etc, might think they control reality, well they are in fact producing the reality of the disaster called the U.S.E. where the illusion of work (psychology again) makes one free.

        Political economics is about universal principles that only we humans can understand, no chimp, no lower animal. That scares most politicians – it is the truth behind that moving curtain at every party huddle-up. And after all no lower species has economics, only ecology.

        • Eireannach

          No, I’m saying politics is not about economics, its about psychology.

          If you think about what I’m actually saying, rather than trying to push your own agenda unthinkingly, you’ll see what I mean.

          Politics is about votes, therefore it is about the psychology – the words, the impressions, the feelings – that result in votes.

          Politicians, and especially their advisors, are consummate psychologists.

        • bonbon

          So you do accept a physical economic reality, universal principles, or do not?
          It is difficult to know what you are saying. Do you agree with the “consummate psychologists”, fall in with them, capitulate to them, salute them, hold out the hat to them?

          Am I hearing Beal Bocht here?

          Sounds like something out of Corcadorcha, Eireannach.

      • Pat Flannery

        It seems to me as an American that one of the fundamental flaws of economic governance in Ireland is the concentration of too much power in too few bodies e.g. the Central Bank and the IDA.

        I recently found to my horror that the Central Bank of Ireland has been appointed “competent authority” for all securities markets regulation. Consequently the CB, which consists of constituent banks, has a monopoly over securities trading. There is no SEC in Ireland.

        It has long been a jaw-dropping observation to me that the IDA has charge of all new industry in Ireland, supposedly an “open” economy! Giving such control of the capital side of a country’s industry to an “industrial authority” is like putting that country’s affiliated unions in charge of all hiring.

        The American concept of separation of powers seems totally absent in Ireland, yet the Irish claim to admire and imitate America above all other countries. Believe me, they are very different. Ireland is not an open economy.

        • bonbon

          What do you call Obama’s biofuel-quota executive order? Open economics?

          Anyway Obama is also violating separation of powers, and will likely face impeachment.

          Senator Harkin succeded in Introducing S. 985 To Reinstate Glass-Steagall against massive opposition, so there is hope.

          • Pat Flannery

            You are destroying this site bonbon, I hope you are proud of yourself.

          • bonbon

            Oops, there I go again, disturbing the Obama fans, ruffling the feathers.

            Obama is destroying the transatlantic site, and some Royals are proud of him.

            Instead let’s destroy the bank-gaming that’s at it again, as DMcW implies – split them. Now that takes guts.

    • joe hack

      “The eternal abortion debate and Wallace/Shatter”

      “The eternal abortion debate” it concerns people, all people!

      The Wallace/Shatter debate goes to the hart of how ours and other countries are run – how our bank are run.

      Pat Flannery Don’t go into politics you would be lucky if lasted five minutes.

  19. Reality Check

    It would be interesting to know the age profile of the people who are bidding the properties up.
    I’m guessing “Generation George hook”; many on massive pensions, no negative equity and totally oblivious to how good they have it.

  20. Beaver

    1st point: I dont think these expensive houses are being bought using bank loans. I think they are being bought for cash by people who cant get a return on their savings in any other investment and and are gambling that weve hit the bottom´on property prices.

    2nd point: ´´They have only two choices: stay and take whatever subsistence-level job they can find or leave and take their chances elsewhere.´´ At least I now now what the Irish have in common with the Japanese.

    • bonbon

      I begin to believe that bail-in threat, the promised daylight robbery by the soon planned Banking Union, is driving kamikaze housing. The irony here is those who believe €100,000 is safe are making a mistake.

    • Bamboo

      Very valid points, Beaver.

      On the other hand I do think that these prices are simply not true at all. It is what David pointed out some articles before that the property pornographers are at work again. This is a classic example. Prices are fantasy prices – see who will bite?

      The upmarket Dublin area is the last point of hope of a playing ground for property pornographers – knowing there is absolutely no hope in hell for the remaining market. The banks are the heads of this culture.

      It will all depend on our nation’s common sense and intelligence how these two cultures will develop. One of a playground with fantasy prices and one with the reality of common sense prices.

      • Beaver

        My ready reckoner is that a house is worth 14 times the annual rent you can get for it. This tells me Irish house prices are still to high. They should also only rise in tandem with average wages.

  21. bonbon

    http://www.france3.fr/emissions/pieces-a-conviction/diffusions/15-05-2013_51397>BANQUIERS : ILS AVAIENT PROMIS DE CHANGER Bankers : They promised to Change, on France3. This is an excellent expose of the failure to do anything at all about the banking system by Sarkozy to Hollande. A good lesson for Dublin.

    Why DMcW expects something different to happen when nothing was done to change banking, is beyond me. See the video – promises and morality pantomines, fake legislation are for the birds. Only splitting the banks will work.

    • bonbon

      BANQUIERS – ILS AVAIENT PROMIS DE CHANGER Bankers : They promised to Change, on France3.

    • bonbon

      Il y a 5 ans, le monde était secoué par une crise financière sans précédent. La promesse alors : une finance plus morale, des banquiers plus transparents et un consommateur mieux protégé. Cette nouvelle investigation dévoile les terrains de jeu actuels d’un monde de la finance plus opaque que jamais.
      ….
      5 years ago, the world was shaken by an unprecedented financial crisis. The promise then: a more moral finance, bankers more transparent and better consumer protection. This new investigation reveals the playground of a world of finance more opaque than ever.

  22. Excellent article and I am really glad you raised it. Recently the Central Bank published a paper backing up what you say about small firms being identified as the job creators – it can be read at http://www.centralbank.ie/publications/Documents/02RT13.pdf

  23. joe hack

    David your important article is missing some questions/answers…

    Are those now living in houses in up market Dublin in financial trouble and need to sell-trading down?

    Are banks lending for these properties?

    Is it not conceivable that some with savings are fearful that there saving will be used to bail in?

    Since money sitting in bank accounts is dead money has the Cyprus
    effect worked as savings money may be moving and gold is dying etc.?

    I would be more concerned if this was happening in ‘down market’ Dublin but it certainly needs watching and analysis.

    Etc….

  24. Wills

    Shout it from the rooftops David – somebody with the microphone needs too.

    NAMA and blanket guarantee the two card stroke now showing its real agenda – Ponzi Rep mark II.

  25. lff12

    I agree, truly depressing. As a tenant, I live in terror of the kind of extreme rent hikes that crippled me & left me penniless during the last so-called “boom.” Its also not just youth that gets squeezed, its the arts that gets squeezed, its incubating small upstart companies being smothered to death. You’re right about temping: the big lie about the current so-called “IT boom” is much of it is in short term, temporary 6-month contract jobs where everybody (including the state with its crippling VAT on services) creams off you. At least though, we IT workers have the luxury of work & a good wage – at least for now. We are also forcibly self-employed (who in their right mind would CHOOSE to pay their “employers” PRSI by themselves, thus nearly tripling their USC rate? – nevermind most cannot afford this luxury) which means difficulty accessing welfare WHEN the next IT crash occurs.

    And of course, the government and business elites are hurriedly telling us we must print more visas to import more (i.e. cheaper) foreign IT workers to force down wages . . .

    The housing situation is very scary for those of us already rogered hard by the last pretend housing boom. Why not tax gains on profit made from selling houses on like every other business? Can’t we do anything right here?

  26. Reality Check

    “It’s all a matter of Psychology” – I agree

  27. joe hack

    “”"”"”"The UK has spent almost £2bn housing vulnerable homeless families in short-term temporary accommodation, according to figures that demonstrate the scale of Britain’s housing crisis.

    Rising private rents, a shortage of affordable housing and benefit cuts have forced local authorities, particularly in London, to place increasing numbers of households in bed and breakfast accommodation, hostels and shelters.”"”"”"”"”"”"

    Same here in the emerald isle and all this while empty ghost estates- lay empty- we pay twice in bank bailouts and rent allowances! and who is protected by this ?

  28. Reality Check

    - Eireannach.

    Btw Bonbon looks like a classic case of “flight of ideas”
    if ya know what i mean…

    • Eireannach

      Reality Check,

      Bonbon is evidence that there is some truth in the assertion that Lyndon LaRouche and LaRouchePac are, indeed, dangerous.

      • bonbon

        The only dangerous thing in Corcadorcha (dark bog for those West Brits of the Pale), is sunshine, a break in the clouds.

        It tends to show up the inmates of the shebeen called the U.S.E. (where work makes you free) for what they are.

        • breltub

          Jez Bonbon, you are like the blanket bombing shock and awe therapy of this blog.

          Do yourself and everyone else a favour and apply your glass-steagal policy to your own rantings.

          Separate the derivatives of what you are saying from what you are saying and help the blog blossom. Say less, think more!

          • bonbon

            It is now a household word! Even the entrenched have no choice but to “explain” themselves!

            Get on board, this is the clincher. Never mind your golden trinkets.

  29. TrackerMan

    David, good article, nice follow on from last week, with stock markets going up, driven by worldwide quantitative easing now going into overdrive. This is driving up property prices in Dublin, Germany, London (average price now over £500k) & nearly all of first phase at ex. Treasury Holdings Battersea power station sold out – 824 units out of 866. It is part of a medium term reflation trade / financial repression (for those that don’t have exposure to inflation linked assets). It may well end in a slump / massive bubble at some point, but right now given high unemployment / weak economic growth – your famous waterfall of credit will flow for some time yet & it is having unintended consequences with cash being channelled into unproductive inappropriate areas where supply is tight – equities, bonds and property. Asset misallocation / mispricing is rife at present, but then so is the financial system.

    • bonbon

      The financial system is insane. And the efforts to regulate it like the German “Muckefuck” reform are even more idiotic. So what does DMcW expect? A waterfall of credit from a lunatic asylum where the patients (accountants) have taken over?

  30. Reality Check

    - The start of Von Mises’s “crack up boom”???

  31. 5Fingers

    100th Comment?

    Interest rates are still very low and so too is the level of money available for lending. I’d love to know who is buying? Are banks really lending to property? OR are savings going into property because people fear for their deposits? Could this be the run to “Gold” like assets except instead we are talking about land and property? Indeed it could be seen as a way for the banks to hover up more assets.

    • TrackerMan

      About €92.5bn in private sector deposits in this country at the end of March last, combined with people in good jobs in the cities is more than likely driving this. Very limited new supply on stream in Dublin – lowest stock levels for many years unfortunately, leading to 20 / 30 people looking at houses ar weekends in the €350k to €500k price range. Gold commodities fearful of China collapse, Aussie dollar down majorly over past week on this threat…keep an eye on metals and Aussie over the next 2 months / Chinese port activity.

  32. molly

    Theres a lot of people out there who sold there house at the good time to sell under advisement and rented so that’s where the cash comes in.
    I was advised to sell my house in 2007 and rent because the market was going to crash and I would be able to but the same type of house for a third of the price.

  33. Adelaide

    No Country For Young Lovers

    Ponder This: Fact: More adult diapers are sold in Japan than baby diapers.

    ‘Shamrock Diapers For Shysters’, anyone? An Irish start-up with great future prospects in the domestic market?

  34. Adelaide

    What is Big in Japan?

    Suicide Warning Signs at Public Forests,
    the return of Arranged Marriages
    Feeter homelessness as an accepted form of ‘lifestyle’
    Feeter ‘Communal Renting’ as an accepted ‘term’ for overcrowding
    exploitation of Feeters as forms of TV entertainment.

    I’m sure the young there can echo David Sylvian’s chorus, “The Ghost of my Life”.

  35. Bamboo

    Adelaide, Are you in Japan at the moment?
    I was working there in the early 90′s. Absolutely enjoyed the culture and people. The overwhelming humbleness of the people is something you won’t forget that easy. Japanese Language seems to be an issue among the Japanese as the interpretation of words and sounds can be so different.
    Have no idea how it is now.

  36. Bamboo

    You may remember the joke of the middle-aged. They all went Ski-ing. Spending the Kids Inheritance.

    Many of this group had some extra cash and spent it abroad on properties along the Mediterranean coasts, with some extra loans (push) from Irish Banks. Banks were not interested in why you need that extra cash.

    These properties are supposed to be enjoyed by the children as well. But usually children have better things to do then going to these places that mum and dad have chosen. Asia and Australia were more popular then the Mediterranean.

    Then things went absolutely bonkers and Bulgaria and other East European countries were introduced as a possible gold mine to lure the middle aged groups.

    Many of this group are stung abroad. These foreign properties are usually hidden from the taxman as it was easy to hide. Something that we really don’t have any data about.

    • bonbon

      The banks so have the data. I recently encountered an “advisor”, bank consultant, with a portfolio of Portuguese properties.
      I mentioned that any moment Portugal would need a bailout- spot on I was indeed.

      So how about insurance? Well she called in another advisor, consultant, and I asked “Does this insurance company share the same premises as the Bank?”. Yes, but they are totally separate! As they say in Geneva, Mon Oueil! Pull the other one. Or in NY, my nose has stretch marks!

      I mentioned Glass-Seagall, where insurance and investment were hermetically sealed from commercial deposits. A Cold Shower! Wow!

      Now this did not happen in good old Dublin, rather at the “core”.

      Try it yerself. It is education in action. Something never encountered in “classes”.

  37. george

    I think I heard in the Mariane Finucane’s Show of few weeks ago, that the head of a US hedge fund is here in Ireland, with a budget of few billion, to buy all the property that would be good investment at a good price. Can this something to do with it?
    .
    Anyway it seems that this absurd or kamikaze form of capitalism without any safety net, to preserve the structures of civilised societies came home to roost. It seems that took more than five hundred years but the perverse nature of a system in control of the Banks, some perverse Corporations, and most of the politicians (who specialise in giving brilliant speeches when they are in opposition and want to be elected, but with no backbone to confront the former when in power) that without mercy destroyed other cultures in America and Africa, its showing its true colours at a global scale.
    .
    And some of us played our part as well. The more we had, the more corrupted we became and we voted for corruption. We all wanted to speculate, to own few more apartments, to have in some poor suckers to pay the rent; in case the secure job in the public sector and the eighteen weeks holidays wasn’t going to be enough, to provide for the style of living we became accustomed to.
    .
    The bubble has burst, and we as little children are crying in the dark…some are entitle to it even in the Public Sector, but others are still living in cukooland.
    .
    Paraphrasing Becket somebody ought to write a play: “Waiting for Growth”

    • Adam Byrne

      Grote.

    • bonbon

      But the kamikaze “capitalism” has a safety net, a guaranteed bail-in. What do you expect them to do, bungee jumping? Well that is it – just before hitting the ground they are pulled up with public and private depositor money! Hey wake up, it’s a sure win!

      How about cutting the bungee while they are in full ballistic flight. Sorry guys, we changed out minds but you get to fly!

  38. george

    Few days ago at three o’clock in the morning, I had to bring a friend of mine to a small town, to take a bus to the airport. And who do you think was offering the service? A private bus operator, well managed from the top! Do I need to say more?
    .
    The town in itself had an eerie feeling, as one of this desolated towns you see in the movies, from the far west of the USA. All of the small shops where boarded up, except that in the main cross where the bus stop is, there are three shops left: a Supermarket, a seedy Pub, and a Betting Office. Somewhere on a plywood that was used to board up one of the abandon shops, there was a poster for The Gathering. The footpaths were all full of dirt, there was not a single flower basket hanging anywhere, and at least one of the roads reaching the town was horrible.
    .
    My friend said to me, “if this is a reflection of what we are as a nation, we have to do a lot of soul searching…who in hell would like to see this?”. Was as if the bitter taste left by our recent emigrants, and home owners in negative equity, and willing to work unemployed people, left a bitter taste in the air…broken families, broken dreams, broken communities! And as if the seedy Pub and the Betting Office, and the general awfulness of the town, were the monuments of our own collective failures.
    .
    Five O`Clock in the morning, I received a text message of him from Dublin Airport.
    “Thank God to “XYZ Bus” and to Ryanair, I can do this trip…lets hope something positive will come from my final interview in Berlin. Thanks!”.
    .
    Probably a Junta made up of people like Michael O Leary, Bobby Kerr, and the so much hated by the puritans of our society Mr Sean Quinn, would have this Country working as it should. Making products and offering services of great quality, and our towns could look lively, with busy and nice shops, clean footpaths, good quality public amenities and roads, and with a Public Sector and Professional Classess thinking in real terms!

    • Deco

      Oh but this country “works” alright – just not for those who do the work….it works for the insiders, the cliques, the well connected.

      And you are correct. We are truning into a wasteland.

      Even Iceland has more of a clue.

    • paddythepig

      So many Irish people are filthy, lazy slobs. The thought of sweeping the path outside their front door, or cleaning their windows, or trimming a hedge, or even cooking a proper meal would send them into convulsions.

      • Deco

        Ah yeah, but shurr aren’t they the very best customers in the local boozer….and the chipper….and the bookmaker…

        Oh, hold on a minute !!!

      • Bamboo

        Are you being too negative here, paddythepig?

      • Dorothy Jones

        Ah paddy, what are you at at all

        • I often disagree with paddy however on this rare occassion I concur.

          • Adam Byrne

            Same here John. I don’t mean to be negative either. It’s a terrible shame because this place has great potential but it’s riddled with pure greed, sloth and corruption, apart from notable exceptions. Most people just can’t be arsed doing anything for themselves, then they vote the most ridiculous candidates to rule in a system that is already beyond broken in the first place. Best thing to do is emigrate, as I will again in the very near future.

          • bonbon

            Back to the view of Ugland House then? Beats the view of the IFSC? I suppose palm trees provide balm?

          • Adam Byrne

            That’s the ticket Mr. bonbon, yes.

    • Bamboo

      You are so right! I wish things were different. I wonder why this is and wish I could find a study on this subject.

      • Bamboo

        Adam, myself and my wife are here one more week in Ireland and we’re off for a couple of years. It is part of a long-term plan. It is only speeded-up by the economic circumstances. I hope you are not leaving because of Ireland. You probably know everywhere in the world is the same or worse even.
        We’re looking for new adventures and learn more from what other cultures can give.

        • bonbon

          Noonan speeded it up for 78,000 people last year, a lifestyle choice he said. Of course they were only looking for “adventure”.

        • Adam Byrne

          Best wishes on your travels Bamboo, I hope everything works out well for you? Where are you heading? Personally I am going back to the Caribbean in a few years to live on my land. It’s better there than in Ireland. Regards.

  39. pauloriain

    Just back from the UK on a job. I was staying with an English couple who’s jaws dropped when I told them there are only 6 million people on the whole island of Ireland.

    It once again brings me back to something I’ve posted here before, there can’t be a supply & demand problem in Ireland, which see a shortage, unless of course it suits someone……

    We are very much tied into a UK narrative, because of the amount of British media we consume and that narrative dictates that property should be expensive.

    It’s time to knock this on the head. One measure that should be put in place is a tax on prime development land, which is left idle, along the lines of either use it or lose it. There is going to be a very good reason for this once the property tax kicks in full-time, because effectively the local authority will be losing out on tax revenue until the land is developed.

    Also think of the infrastructure, which we as a community have invested in being under used, because a site lies derelict so someone can speculate on it appreciating in value. A prime example of this is the Luas down to the Point Depot, it would be carrying more passengers, so would the buses and in Dublin bus’s case the staff might not be facing wage cuts if they had more customers.

  40. Deco

    We don’t live in an economy any more (let alone a society).

    We live in a Ponzi scheme. A ponzi scheme propped up by dodgy bankers, compromised media outlets, and controlled politicians.

    Money is in charge. And that is the order of the age.

  41. Adelaide

    When will the Money Bubble pop? The Daddy Bubble of all Bubbles. This decade, sooner, never-infinite kicking of cans in slow-mo, a wheeze rather than a pop?

    • bonbon

      Are you wishing “for a crash before you die” as von Hayek said in his 1983 interview? To usher in what exactly? World Gov’t, a monetary coup, a genocidal population reduction? British subject Hayek of the London School of Economics, true to par, wished for an international force to police free trade.

      This is a very mistaken “flight forward”. A symptom of fear.

      Much better to defuse the bomb with Glass-Steagall – cut the fuse!

  42. Ghost Towns

    Imagine some day soon while you are walking accross OConnell Bridge Dublin you see at intervals various poor beggers that you once knew …like….Pat Kenny…..Marion Finnucan ….Gay Byrne …..while not drunk they are discrepit ….and you are on your way to work in a sweat shop run by either eastern europeans , chinese or africans ….and they own your passport.

    What is the real agenda of an elected Irish politician who is Jewish and releases a book with million shades of grey and call it Laura ?

  43. Bamboo

    How I wish http://www.rte.ie/live/ can get their server working properly.

  44. Adam Byrne

    What do the nutjob goldbugs think of this?

    https://www.youtube.com/watch?v=pBOLhvuGcPE

  45. breltub

    I heart Marina Portnaya and Satoshi Nakamoto.

    So the government seizes account used by people to non-coercively buy electrons. Seems to me that the nuttiest nutjob goldbug may have a point.

    When it comes to leaving anything in a bank, reality is, If you don’t hold it you don’t own it!

    As for bitcoins, wouldnt they prove that glass-steagal is a false choice, and it merely keeps the cancer of corrupt banking alive. Poor bonbon, fighting the last war!

    • bonbon

      “bitcoin”? A diversion like metal. Doomed without splitting the banks. And doomed anyway. It is the disease of monetarism, still a raging pandemic. Curable, for those willing to take the medicine.

      • breltub

        Point is, we need banking, not banks!
        Glass-Steagall is a false choice. Like you need to have cola and only cola, regular or lite?

        We need to drink, we do not need false choice monopoly.

        Keep up your tirade!

        • bonbon

          Banking without banks is all sizzle and no steak alright. Exactly what we have now – kamikaze money printing and no credit for the physical economy.

          Hard to know what yer gettin’ at.

        • Adam Byrne

          Mr. bonbon drinks Kool Aid as a matter of choice.

  46. bonbon

    Why Does John Bruton Cite Glass-Steagall in the Irish Independent?

    John Bruton of the IFSC cannot avoid it, whether he likes it or not.

    Glass Steagall Will Stop Bail–In Banking Union In Its Tracks!

    • michaelcoughlan

      Whether glass stegal gets implemented or not it’s too late. The dollar is finished and a gold backed eastern method of international system is now on the cards.

      Try telling 1.2bn chineese and 1.1bn indians how worthless precious metals are. It would be some fun to see all 2.3bn people laughing their holes off at you.

      • bonbon

        You are a total nutcase. 700 million Chinese and 700 Indians earn under the UN poverty rate. The famous clowns at a certain passee mobile phone company that projected 700 million customers drank the same thin monetary gruel you are swilling around.

        China is laughing at you and the metalbugs.

        I’d say China would have no problem separating banks – after all they follow FDR’s New Deal as Jiang Zemin said in the US.

        Time we woke up and put this in action here.

        • michaelcoughlan

          “China is laughing at you and the metalbugs”

          Your dead right there. They are buying a lot more gold than I can get my hands on. As for the 700 million Chinese and 700 million Indians living in poverty I suppose if someone offered them a 1oz Krugerrand gold coin they would turn their noses up at it would they? Your posts are bread and butter stuff for me Bonbon.

  47. Bamboo

    IS GOOGLE DOWN? DOES ANYBODY KNOW?

  48. joe hack

    Having THE DOUBLE IRISH and eating the Apple cake too

    Ireland an inshore off shore “tax haven” Irish “ghost companies”

    Ireland the land of ghost and ghouls

  49. joe hack

    “”"”"”"”The double Irish arrangement is a tax avoidance strategy that multinational corporations use to lower their corporate tax liability. The strategy uses payments between related entities in a corporate structure to shift income from a higher-tax country to a lower-tax country. It relies on the fact that Irish tax law does not include U.S. transfer pricing rules.[1] Specifically, Ireland uses territorial taxation, and hence does not levy taxes on income booked at subsidiaries of Irish companies that are outside of the state. In the late 1980s, Apple Inc. was among the pioneers in creating this tax structure.”"”"”"

    Caution the above is an extract from Wikipedia!

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