June 24, 2013

ESM can ignite our economy

Posted in Banks · 189 comments ·

If the chink of financial light that shone from Brussels late last week can be used to address the growing mortgage crisis, then the news that the Europeans might cough up for the next round of mortgage defaults may be worth celebrating.

Make no mistake about it: the way the domestic economy is going and the way mortgage arrears are rising, there will be a need for further recapitalisation of the Irish banking system.

Obviously the eurozone chief bottlewashers didn’t say they would pony up for Irish mortgage defaults, but that’s what the decision last Friday could mean.

As losses mount on one side of the Irish banks’ balance sheet, someone will have to write a cheque on the other side of the balance sheet – the thing has to balance.

The way mortgage arrears are headed in Ireland, it looks like only a matter of time before the banks need new capital. There will only be two places from which that can come. The money is either from the Irish taxpayers or the taxpayers in other European countries. The ESM is other European taxpayers’ loot.

Last Friday there was lots of talk about being able to claw money back from the Europeans, money that we had already put in. This doesn’t look likely – not least because Irish taxpayers have injected around €32 billion into AIB, PermanentTSB and Bank of Ireland and the total European fund for bust banks is only €60 billion. It doesn’t seem reasonable to think that 50 per cent of a fund which is supposed to be sufficient to cover all bank debts in the eurozone would go to a country with 2 per cent of the eurozone population.

In addition, as the European fund would only take a position in the Irish banks after buying shares, it might be worth remembering that Bank of Ireland’s total market capitalisation is just over €4 billion and AIB much less. In fact, AIB is probably worth nothing. If it had value, don’t you think the government would have flogged it by now?

So, even if the ESM bought both entire banks, we, the taxpayers, would be massively out of pocket to the tune of possibly €28-odd billion.

More likely, and a better bet now, is that the cost of further recapitalisations could be met by the ESM with real money.
This is what the state may play for now. But why, you might ask, would the Irish banks need yet more money?

After all, weren’t we told that Irish banks were the best-capitalised banks in Europe?

Yes, they were, as long as they didn’t open for business. As long as they were safe deposit boxes for deposits, they were grand. But as soon as the banks’ balance sheets came into contact with the real world of excessive debt, arrears and mortgage defaults, the notion that they had loads of capital became farcical.

The latest news from the Central Bank shows that arrears are mounting relentlessly. Anyone who works in the real economy knows why. People simply can’t pay their mortgages, because incomes are falling. Taxes erode the incomes of those in work, and unemployment destroys the ability to pay of those on the dole.

This is simple stuff, really. As income falls, it doesn’t really matter what the rate of interest is. The ability to pay is reduced.

But why is your income falling? It is because someone else is not spending. After all, my income is your spending; and your spending is my income. So your income falls because my spending has fallen and my savings have risen.

Normally, when someone chooses to save, someone else chooses to spend those savings and the system rights itself. But this balancing mechanism is not happening, because the banks are petrified to lend.

But the very fall in income makes the banks more neurotic. This neurosis is because, even though your income has fallen, your debts have not fallen in tandem. In fact, because the interest rate is positive, your debts are actually rising.

When the banks see income falling, the debt-to-income ratio of their existing portfolio rises. This prompts more hushed conversations between the bank manager and head office. They get even more worried and lend out less, not more.

This process means that the banks simply sit on deposits and don’t recycle cash through the economy. This pattern is how the economy gets stuck.

Without fresh credit into the economy, income falls further and arrears rise, which is why the latest Central Bank figures show that ordinary people are slipping further and further into the mire.

According to the bank: “There were 95,554 (12.3 per cent) private residential mortgage accounts for principal dwelling houses (PDH) in arrears of over 90 days at end-March 2013, up from 92,349 accounts (11.9 per cent) at end-December 2012.”

If it was not clear that Ireland needs a large deal on personal debt up to now, it should be very clear from the latest figures. Such a deal could be executed by a large debt-for-equity swap whereby the banks take equity in the house and reduce the mortgage accordingly.

The ESM could pay for this, allowing those in debt to recover and begin to see a little bit of hope for the first time in years.
A debt deal of this type would put money back in people’s pockets, and would have the advantage of doing so immediately.
Many opponents of debt forgiveness or debt deals like this cite something called moral hazard. But shouldn’t we be more worried about real hazard – the real hazard of tens of thousands in mortgage arrears, the marriages breaking up, the mums and dads with no jobs?

This is a real hazard, and it is the real risk of a lost generation, living in a country with no hope. Should not this be what we worry about?

The idea of debt forgiveness is rooted in common sense as much as economics. It is as old as the Bible. Readers of the good book will turn to Leviticus or Deuteronomy to see chapters devoted to how you need to forgive your neighbours’ their debts.

The expression “the jubilee year” originates from the Old Testament. The wisdom of the Bible was that, if you don’t forgive your neighbours and you continue to subjugate them in a debtor’s prison, they eventually lose hope and turn against you.

As Tony Soprano might say, debt forgiveness is only “good business”. Bad business is grinding your neighbours down and not expecting them to stand up against you.

If last Friday’s European bank deal allows for recapitalisation funds to be used to reduce the debt burden on our neighbours who need a break, well then it should be seized immediately.

Because the clock is ticking. On Thursday, the Federal Reserve signalled a dramatic change in policy. Having kept interest rates low for five years, the Fed has now moved to a policy of pushing up rates. When US rates go up, global interest rates tend to follow, and you don’t need to be a genius to figure out the negative implications of this for Irish mortgages in the near future.

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  1. JapanZone

    Subscribe? Really?

  2. Dorothy Jones

    http://www.faz.net/aktuell/wirtschaft/europas-schuldenkrise/wege-aus-der-schuldenkrise-biz-sieht-grenze-der-lockeren-geldpolitik-erreicht-12241432.html Well lets hope Ireland gets in there first #cause there isn#t enough money to further continue bailing out banks. Die Bank für Internationalen Zahlungsausgleich (BIZ)Bank for International Settlements issued a warning in its yearly report.

    Mr. Wolfgang Munchau writes about this in the FT at the weekend.

    The SPD don’t like the new ESM decision one bit. There will be a lot of pre-election handbags in the Bundestag as an antidote to Wolfie Schäuble’s crowing.

  3. JapanZone

    My aunt, visiting from the US, thought I might like to have the weekend’s Irish Times property supplement, the front page of which featured a country house in Louth with a tennis court and outdoor swimming pool (in Louth?!). Looking at it, I didn’t know whether to laugh or cry.

    Property supplement vs. mortgage arrears. Us vs. them. Haves vs. have-nots. The defining theme of our time. Or rather, we’re waking to the fact that it’s always been the defining theme of our society even if for the last couple of generations we thought we had achieved more of a balance.

  4. Beaver

    The cost of borrowing money from private sources has risen since 2008 unless you are borrowing from a central bank. If the yanks stop the QE game there will be one less central bank supplying cheap loans and the market price of money should rise further. However as long as the ECB keep their rate down the average Irish tracker holder is laughing. They should stay down until the european economy improves which wont be any time soon. If however the Germans manage to get ECB QE banned then the cost of Eurpean money will rise rapidly and then it will be a case of ´´If you think the last 5 years in Ireland were bad, watch this…´´.We are in the unusual position of needing the European economy to weaken.

  5. Grey Fox

    I remember 15-20% interest in Ireland and the vision of increasing interest rates in the current situation is truly horrifying, especially as we have absolutely no control over whether rates rise or not we are the flea on the tail of the dog… the suggestion by the Master of the High Court is becoming more and more appetising,” pay the banks with an IOU”…get the bit of mortgage money being paid back into the economy and we will see a recovery of sorts, worry about the banks later, they don’t really care about us as long as they are on life support, they are not lending or dealing with distressed mortgage borrowers so we need to park them until they become willing partners in a real recovery strategy. The banks are stronger now and have more control that ever, a little leadership from government wouldn’t go astray either instead of playing best boy in the class, but then we have only to look at who I am asking for leadership from and the response becomes apparent. Heaven help us ‘cos at this moment nobody else will…time to do it ourselves,,methinks!

  6. EugeneN

    This can only work with repossessions.

    1) BTLers not paying their mortgages are repossessed and the property put on the market.
    2) People who are unemployed will have to be repossessed. Otherwise we will have one group of unemployed with houses they “own” and others on social housing.

    If this doesn’t happen the rental sector will be paying taxes to prop up their landlords.

    • Bamboo

      EugeneN, re point 1 and 2. Who do you think are interested in these properties once they come on the market? More BTLers?

      • EugeneN

        Bamboo, people now in the rental sector who are in the rental sector because housing supply is limited. Maybe cash buyers too.

        In any case if we need more funds the Germans are going to demand repossession. Otherwise Der Spiegal comes over and shows an unemployed man in Ireland paying owning his house for €50 a year “on your taxes”

        The debt equity swap is not going to be a free for all. People will have to pay something significant.

        • Steaf35

          Eugene N……Do you not think that people have paid already.???…their jobs,dignity and any ounce of self respect they had are gone….and now their homes as well..!!….and your speel at drawing board economics is to condemn the next generation also!! Try going back up the supply chain for some victims..!!
          Rant over..!

          • redriversix

            “This can only work with repossessions”

            what garbage..more opinion based on theory rather than experience.

            I don’t care if they are btlets or not,were possible..ALL repossessions will be resisted.


          • Colin

            Many people who rented have lost their jobs too. Some who rented have managed to keep their jobs or get new ones both at home and abroad. Your dignity takes a battering either way. Loss of self respect isn’t only the preserve of mortgage holders.

            So what’s wrong with someone who can afford to buy a house taking over a house which is occupied by someone who can’t afford the repayments?

          • Joe R

            “So what’s wrong with someone who can afford to buy a house taking over a house which is occupied by someone who can’t afford the repayments?´´

            That would be called capitalism. And it would involve the rule of law.

            Capitalism does not occur in Ireland in its total form ( e.g. NAMA, bailouts, zombie hotels, etc ) and the rule of law does not apply so much if you are rich and powerful ( e.g. Anglo executives banks in general, civil service regulators, etc ).

    • There are 300,000 empty houses so that gives you a problem the idea that there is a shortage. It also pours cold water on the myth that there are tons of cash buyers. It must be a myth because it is based on anectodal evidence

      People in social housing pay rent and are in a good position whether they are unemployed or not. One in eight people with mortgages have a massive problem whether they are unemployed or not

      Your second point sounds like it is based on noting more than prejudice.

      The rental sector always props up the idle landlord class.

      We have a massive housing crisis and it is getting worse. Listening to people calling for repossessions only serves to remind us how selfish and rotten things have become in this country.

      • Colin

        Lets have repossessions of the trophy houses. If you can’t afford your mortgage of your 4 bed detached South Co Dublin pad you bought in the boom for a million, then move out and live somewhere more in keeping with your budget. Why others should pay to keep you in luxury you can’t afford is outrageous. But we have a strong ‘socialism for the rich’ constituency here in Ireland. They say its all the banks fault, so leave them in peace in their nice suburban neighbourhood, I mean think of the children, having to move schools and mix with the riff raff.

        Those who rented up till now may wish to buy these nice South Co Dublin properties if the price is right. The price is being kept artificially high. Repossessions will force the price down, so what’s wrong with that? That’s capitalism, not croney capitalism / communism which is what Ireland has been doing.

        • Joe R


          But the end-game rescue plan for the property crash is wait around for another speculative bubble to be inflated. That is the essential idea of NAMA after all.

          Mass repossessions and the subsequent distressed sales would really force down prices. In a pure market sale they could go for a song. Or not sell at all. That is capitalism. Live an die by the market.

          But lets say for the sake of conjecture, 20,000 euro could buy a new house/apartment.

          Being able to buy houses for the price of a car ruins the possibility for the banks of giving out big six figure mortgages for any houses/apartments near by for well, many many years to come.

          The bankers can´t make money if they are not lending so no serious attempt at mass repossessions will be wanted (thank you very much) by them. More importantly they will find it hard to justify bonuses which are still getting by the way. Capitalism isn´t something why want when they are losing. They will go back to the government, “pick a number of of their arse´´ and tell the whatever tame politician is in charge, very brassed neck like, that they need yet more dough or Armageddon will befall Ireland.

          Enda Kenny is in charge here. He has the same civil servants to advise him as Cowen, etc had. They will roll over as before.

          And hey presto! Banker bonuses saved again!

        • paddythepig

          Correct. Plus, the desire to be kept in your nice South Co Dublin pad, or your trophy home in the country, is an expression of innate snobbery. Mention that you could have a perfectly good life in a lesser area, or in a modest or even small house, and suddenly you hear ‘it’s me family home’, ‘it’s me dream house’, ‘the kids love the schools’, ‘it’s only 5 minutes up the road from Mammy’ – and then you get the clincher from redriversix above ‘ALL repossessions will be resisted’.

          What they want is welfare to be able to live in a leafy suburb, and not fraternise with the riff-raff.

        • Your point is also based on anecdotal evidence Colin and it sounds like you want those in South Dublin who are struggling to vacate their houses so you can pick up one for song

          You said before you were thinking of buying and my thinking is that you aspire to South Dublin and easy access to well paid work across the water. Sounds cool and good luck if that’s what you want

          Socialism, Communism, Capitalism are all meaningless labels and no-one buys them any more

          • Colin

            Your speculation is way wide of the mark Pauldiv. I’ve no interest in buying at anytime in the future in South Dublin. Lets just say, the smell of bullshit in the air there would put me off my food. I want to live near where I work, and that is what I do as it means you can be more flexible regarding early or late shifts which is appreciated by others. No work opportunities in Dublin. Its not a great place to relax and unwind either, that can be done elsewhere at much less expense and superior quality. The weather is terrible, driving a car is a nightmare…..I could go on, but Dublin is not for me.

            My speculation is grounded in common sense.

            You only speak for yourself, and labels/descriptions are still thrown around in conversations I have. I do not plan more than 1 year in advance. Keep it simple stupid – right bonbon?

          • I agree with you Colin. I made an assumption that was based on prior assumptions and I apologise if I took things for granted. I am glad to know you see straight through all that South Dublin clap. It’s refreshing and thanks for saving the day here

            Not seduced yet by the The Bono effect? Apparently he keeps the prices high.
            Bono is the only true reincarnation of the Tooth De Desperate Dan and he has reached a comical mythical status

            If it gets any worse the pagans will end up mistaking him for god himself and that is why something needs to be done now. Like hanging him from a bridge to get the message across. It would not surprise me

            I’d live anywhere. Not sure if my Rab Nesbitt string vest would go down well in the Red Lion though. Even with authentic beer stains and spattered blood spots from all the wife beating sessions

            Give me six months and I don’t see why I can’t be working in London and flying home every Friday. If I was offered it I would go for it now. I feel sharper, more switched on and energetic than ever

            They pay serious money in London if you know your potential

            With the stuff I spend twelve hours a day learning I could be should be classified under ‘dedicated programming talent’. I do it for fun

            I have a small confession. I want to live on the west coast and commute to where the paychecks are. After 10 years of self learning and dedication I feel that it is only fair to become the jet setter again

            Programming job in London. Heaven at home in Sligo. Who knows after a two years I could become one these cash buyers.

            Why not I say. I can choose any one of 300,000 empty properties and make a nice life at long last

            It would be done on potential earnings. Working in London for 5 years at London rates would allow me to be sorted in a few years going by todays prices

            If I ever achieve it all you guys on here are the first ones I would invite to my house warming ceilidh. Seriously

            I come from Red Clydeside yes but I have no problem whatsoever with someone wanting to buy a wee But n Ben

  7. stevedublin

    “the Fed has now moved to a policy of pushing up rates”
    Really? I thought they were just considering slightly tapering the buying of mortgage backed security, nothing about interest rates!

    • Hi Stevedublin

      You are right, the wording was opaque but my reading (and the markets’ too -which is much more important) is that the Fed wants the long end to shift upwards allowing the curve to slope gently upwards. If you’re interested, Gavin Davies has an excellent piece in the weekend’s FT on when the Fed moves. Far more articulate that aything I could write!



    • Original-Ed

      I like the bit about the IMF being worst than the Tans – in fact we were in a proper monetary union at that time and receiving transfers – not loans.

      How can the politics change with multi seat constituencies and pr. – the huge benefit sector and the elites have captured the process. Not current politician will rock that boat – it would take an eccentric to get a clean sweep.

      • Harper66

        “All these remain despite the best intent of the troika. “Generations of passive aggressive slow rising to the top of the heap, regardless of the state of the heap, have endowed Irish insiders with the abilty to obfuscate, ignore, stall and stymie at a world class level. What they miss is a sense of social good, of joined up thinking, of the urgency needed in facing world where power is moving east, and a sense of vision. But then, they are elected and drawn from us.”

        Agree. Luceys article is probably one of the most succinct descriptions of Ireland I have read .

  8. rebean

    Surely Mortgage defaults is a result of lack of communication between borrower and lender. If a borrower cannot afford to pay the mortgage in full then a partial payment akin to a weekly rent should be negotiated. Its not in anyones interest that a bank take a property as there are only so many properties a bank can sell on. Things will look better in ten years as regards the true value of a property. If an individual leaves there house they will need to apply for social housing and therefore its also in the states interest to resolve the issue of negative equities and a joint solution. As far as I can see there is no plan going forward in the country. We are five years into this disaster and no closer to a solution.

    • EugeneN

      If someone is unemployed and has a 500K house he should get it for how much, and own how much equity in the house?

      It isn’t miscommunication – some people will never be able to pay back anything near a proper amount of equity, and someone else will be paying for that. Twice in fact if that artificial propping up of property also keeps rents higher, and property prices too high for him to get into this game. His taxes will be purloined to make his disposable income lower.

    • Adelaide

      “If an individual leaves their house they will need to apply for social housing and therefore its also in the states interest to resolve the issue of negative equities and a joint solution.”

      The assumption that house-leavers/repossessed etc will get social housing has no basis in reality. There is zero chance of this occurring based on social housing presently in (not) operation. They will simply join the rental market. Also, the assumption that the State’s interest is the welfare of its citizenry has equally and most definitely no basis in reality.

      Lastly, “Its not in anyones interest that a bank take a property” , well, there is a multitude of buyers out there who have been biding their time in rented accommodation for years waiting for the tsunami of repossessions to finally happen so they can FINALLY afford a ‘realistically’ priced property. Former homeowners become renters/renters become homeowners. The emotive argument of ‘families out on the street homeless’ is melodrama.

      • This sounds like bloodthirst, prejudice and vulturism and it is nauseating. Ok I get the picture. Guys like you think that the social costs of this disaster are only mentioned by people with bleeding hearts and over emotive reactionary tendencies

        There is nothing to stop all you buying a house because there are 300,000 of them lying vacant

        The prices are low and there is nothing to stop all these mythical cash buyers buying today.

        There are loads of desirable properties available but for some reason you are all fixated with South Dublin

        There is the real stench of snobbery is coming from you all you sound like like the worst snobs of all – plastic ones

        • Colin

          Your 300,000 empty houses are mostly in the middle of nowhere like rural Sligo, where no one wants to live as there is no work there.

          You seem to be defending the right of the economically unviable snob who cannot bring himself/herself to leave leafy suburbia for an inferior property in a less affluent area. Be careful pauldiv, if these people get taxpayers money to stay in South County Dublin, your dole may be cut back further.

          I’d love to see those from working class areas of Dublin who were financially prudent through the boom to afford properties in swanky South Dublin. They may even add a bit of reality to the local communities.

          • You are alive and have spirit. It’s more than can be said of most

            Why do you surmise I am living on dole checks?
            Can you prove it? What was true six months ago might not be true now().

            I could have have a sponsor for all you know.
            A benevolent dictator or a benevolent socialist / communist / capitalist/ who employs people to create their vision. A fixer who can offer technical and operational guarantees that things will be fixed and delivered as expected

            I get contacted by people all the time. I get questions but rarely truly answer them in full. I hate laziness and am prepared to extract a healthy kudos for sorting things. I would never dream of working for the public service because I would be bored to death. I want challenges and new project ideas today

            I will asses ideas and make a serious call for a serious price

            You are being a bit previous. I could be earning 300k for all you know and that sort of cash is out there believe me. It’s there for people who learn and prove what they know. No room for cowboy builders. Only sober and dedicated pros need apply who can guarantee they will be pin sharp on monday mornings

            Surely you realise I am man with a get go spirit with the capacity to make stuff happen. I will end up well off judging by the emails and the feedback from my blog posts. I live on my feedback because it tells me what my weaknesses are what I am doing right. We all need to measure ourselves against some credible baromneter

            It’s the people who will make or break you. I want to be an open source hero and that is where I am currently at. just in case you think I play with myself all day long. Making money is way down my list of priorities but I don’t expect you to understand. The notion is probably alien to you

            I am the technical wizard who turns dreams into reality. I get it. I understand business people and their customers. Try finding such helpful and direct advice on all those cheap crappy business forums will you nowhere fast.

            I can tell you all you need to know about IT and Computing in in an afternoon. I just don’t sell my knowledge because it took 20 years to acquire it. A day spent with someone with their finger on the pulse would be worth serous money to any serious start up entrepreneur. Yet like financial investing this info is all freely available

            If someone offers serious money I will listen and take a plunge as long as I know they are not just messing. End of story.

            I went back to school in 2003 and did 4 years hard at it. It has taken me ten years to realise the power of my potential

            And this takes me back to my favourite subject of all – Celtic

            The Enigma of George Connelly. He was a pioneer and was the first to demonstrate that it is alright to be different

            I saw George Connelly, loved him to bits and still do to this day

            George Connelly was a midfield genius and was probably better than Beckenbauer and he knew it

            He just wanted to go back and live in Fife. Fife is like Sligo and this is why I always smile and marvel at the mysterious genius and his apparently suicidal and self destructive persona

            He was not an enigma at all. He loved Fife and that was his home. A modest country bhoy

            The fact that he was better than Beckenbauer and Cruyff is neither here nor there. He was better for sure and anyone who saw him play in the flesh will tell you the same

            Stanley Mathews.
            Tom Finney.
            George Best.

            Connolly was better than all all them and Jink was better than Best. Now do you get the picture?

          • Colin

            I think you are deluding yourself again Pauldiv.

        • Adelaide

          Could you direct us to where “The prices are low” and “There are loads of desirable properties available.” I’m really really really tired of renting but my damn head always overwrites my heart.

          • As I said before there are hundreds of thousands of properties available. There is nothing from stopping you whatsoever

          • It’s like me asking you can you direct me to the places where there employers waiting for people knocking on their doors so that we can get ‘on out bikes’

            It’s all heresay and a total sadistic joke. You are being royally conned son.

        • paddythepig

          You are beyond deluded.

    • Harper66

      Why have these tapes not been released years ago? Why now?

      • Harper66

        Has there been any more developments on the long mooted banking inquiry?

      • bonbon

        How about Snowden? There are thousands of “Snowdens”, now.

        More “tapes” will appear.


      • Grey Fox

        Harper66 Banks are stronger now than they ever where, they have no interest in sorting out the mess, they are making too much money from bailouts and without the headache of all those pesky borrowers, government has neither the balls or the spine to call a halt to the madness because they would be calling a halt to their own gravy train too, there are apparently thousands of hours of these tapes which indicates the telephone system was the source and all conversations were taped, they should be handed over to the Gardai, the Gardai should be funded and the investigation should be Criminal, thorough and all encompassing, no need for politician led tribunal bullsh1t…just another gravy train for the legal profession and no results…

        • Harper66

          Hi Grey Fox,
          I know certain banks have been working frantically sorting out paper work/legal difficulties on a slew of mortgages. Getting their ducks in a row so to speak.The paperwork was in rag order and mortgages were given on properties with glaring legal problems.

          It suited the banks to keep people in the mortgaged properties until now.Had mortgage holders been evicted the banks would have had the problem of maintaining these properties. As soon as the market can be re inflated the occupiers of these properties will be out on their arses.

          I believe the next couple of years are going to be worse than anything we have seen so far.

          In regard to the Anglo tapes I was of two minds as to why the tapes were released now. I can only see two options
          1 – an attempt by the government to colour or inform any possible investigation
          2 – someone was holding these tapes for such an investigation and seeing the lack of will within government to have any meaningful investigation they decided to release the tapes to the media.

          The more I think about it the more I think it is the latter option.

          If there are hours of tapes then I imagine there are alot of nervous people at the moment.

          I see Michael “the Bull Mccabe” Noonan has claimed he had no knowledge of the tapes…staggering…

      • This is the very first question I asked myself.

        It’s taken 5 years so possibly someone was using the evidence for nefarious purposes.

        It will all come out in the end and no-one will be accountable. That is my prediction.

        • Harper66

          Hi Paul,

          I am not so sure that no one will be held accountable.

          I understand there was alot of astroturfing ( http://en.wikipedia.org/wiki/Astroturfing) on various internet fora once the story broke claiming the tapes cannot be used as they were recording illegally. However it now appears it is standard practice to record conversations within the banking sector.Thus making the question of legality redundant.

          This throws the cat amongst the pigeons. The evidence is there for the world to read and hear.It is not gong away. Some thing will have to be done.

          Interestingly the conversations also provide a timeline descriptions of key events and the actions of others that otherwise we would never have had access to.

          • Harper they have to be found accountable otherwise we can’t move forward. In the past they used to hang people on street corners to prevent the spread of ‘moral hazard’. You could be ported to South Australia for stealing apples

            Today nothing has changed. Neighbours are calling neighbours ‘debt dodgers’ and would be happy to see them hung or deported for failing to make the cut in the high stakes game of kidology and fucked up Irish morality

  9. Bamboo

    Isn’t “debt forgiveness” such an enormous concept?
    Where do we draw the line with debt forgiveness?
    What group does this debt forgiveness apply to?

    1. Does it apply to the group who have so called been “fully participating in the economy”, with all their partying, pompously flaunting their possessions, their properties, their holidays abroad, their useless electronic gadgets, cars, handbags, alcohol, you name it?

    2. Does it apply to the group who think they have such brilliant careers ahead of them because they happen to have been lucky enough to be born in the “right” family with the “right” people in the know and the right educatio and alcohol?

    3. Or does it apply to those who took out modest loans simply to start up a family, a modest accommodation, a modest car to bring you from A to B, to work and back, etc, etc.
    I understand that this is quite a big group in our society – people who didn’t speculate, didn’t party and now simply don’t have the opportunity to come out of their debt situations:
    . These are the people who still have an income and still in a position to pay their loans but barely able to scrape a living, count every penny and have to think so hard before for every single item they buy in the shops.
    . The people who are dreading birthdays, Xmass, weddings and any other social events, amnd can’t even buy themself a drink of alcohol.
    Most likely there is no room for debt forgiveness for this last group simply because these debts are too small in comparison to the big gamblers of society.

    • Mr Happy Dole Dude

      Morals are only important to responsible people. The irresponsible people don’t give a toss and will not been thought any lessons they are delinquent feral beings.

    • EugeneN

      This will create a few winners, and losers.

      1) Winners: People unemployed, or newly lower paid, house owners who can keep houses: Losers the unemployed or poorly paid in the rental sector and next years unemployed will lose their houses ( unless this isn’t a once off in which case the moral hazard is immense).
      2) Winners: The “won’t pays” will have leverage over the banks who might try the easiest route and debt forgive, otherwise the “won’t pays” will get onto live line and whine about repossession or how they can give up private school, or that car they absolutely need, or that higher health insurance policy. Particularly the upper middle classes in difficulty. Losers: The “paid my ways.” even if in financial difficulty.
      3) Winners: People who bought overpriced properties in the boom. Losers: people who didn’t.
      4) Winners: 30 year olds to 45 year olds in the market: Losers – the young who will pay for this, won’t get debt forgiveness and have to pay the market rate for the house where the neighbor is getting for half price.

      And does anyone really believe that in 2045 when an 80 year old is about to hand her house to her children in a will, but is told she only owns half of it, that there won’t be a campaign then to forgive the equity?

      • Bamboo

        Can you try again, please? this doesn’t make any sense to me.

        • EugeneN

          Bamboo, its written at a remedial level. If you have a question about it then ask specific questions – like “What do you mean by “won’t pays”. This is hardly post-structuralism, its written in simple English.

          • Bamboo

            Great, Thanks

          • EugeneN

            There is a mistake, however in 1) Losers: people in the rental sector and the lower paid who cants buy ( not lose) houses.

          • EugeneN

            Ok, I’ll explain a bit better.

            When I said

            3) Winners: People who bought overpriced properties in the boom. Losers: people who didn’t.

            I meant

            3) Winners: People who bought overpriced properties in the boom. Losers: people who didn’t.

          • Bamboo

            Sorry EugeneN, I am more confused now after your explanation.

            When I said
            3) Winners: People who bought overpriced properties in the boom. Losers: people who didn’t.
            I meant
            3) Winners: People who bought overpriced properties in the boom. Losers: people who didn’t.

            Are you not saying the same thing here?
            Anyway, it doesn’t matter – my question is: How can you be a winner if you bought overpriced houses?

          • StephenKenny

            “Anyway, it doesn’t matter – my question is: How can you be a winner if you bought overpriced houses?”

            Because you get to live in it, rather than having to move to somewhere that you can afford.

            If there was no moral hard – social downside – to debt forgiveness, there’d be no particular reason to insist that anyone ever repaid debts.

      • paddythepig

        Excellent stuff EugeneN. Keep posting.

  10. Mr Happy Dole Dude

    A Moral Hazard – those in the know don’t know the known knowns – private companies are running a small government…

    The Anglo tapes,

    Mr Bowe then says: “If they (Central Bank) saw the enormity of it up front, they might decide that they have a choice. You know what I mean?

    “They might say the cost to the taxpayer is too high. But if it doesn’t look too big at the outset … if it looks big enough to be important, but not too big that it kind of spoils everything, then, then I think you have a chance … it can creep up.”

    Mr Fitzgerald asks Mr Bowe how they had arrived at the €7bn figure for the Central Bank. Incredibly, Mr Bowe laughs and replies: “As Drummer (CEO David Drumm) would say, picked it out of my arse.”

  11. Adelaide

    David’s paragraph… “But why is your income falling? It is because someone else is not spending. After all, my income is your spending; and your spending is my income. So your income falls because my spending has fallen and my savings have risen. Normally, when someone chooses to save, someone else chooses to spend those savings and the system rights itself. But this balancing mechanism is not happening, because the banks are petrified to lend.”

    … can be summarised as…
    “But why is your income falling? Because the banks are not lending.”
    We operate in a debt-based monetary model. There is no need for the misleading ‘my income-your spending’. Better to say…
    “But why is your income falling? Because the money supply is contracting.”

  12. Joe R

    I find it interesting that for Spain which had a lot of numerical parallels with the Irish situation has an arrears rate of just 4%.

    ( following link in Spanish – apologies )

    Spain has actual quick evictions that happen about 50 per day so ( 16000 per year). It also has a partial no-recourse return the keys law. And a lot of mortgages are for a longer duration than Ireland.

    If anyone can read Spanish ( I think D McW can ) here is an interesting well organized support group for those affected by mortgage problems they managed to date to paralyze 715 evictions according to the site.


    I would be curious to know why the huge difference between Ireland and Spain on this.

  13. whatamess

    not directly mortgages related and not for the faint hearted …

    The taped conversation between Anglo Irish executives John Bowe, head of capital markets, and Peter Fitzgerald, director of retail banking, took place three days after the collapse of Lehman Brothers in September 2008. It reveals how Anglo Irish was seeking €7bn in financial aid from the Central Bank of Ireland even though senior executives knew the bank would need more cash.

    12 minute phonecall ..


    so if Euro 7bn was the ‘magic number’ for Anglo to keep the show on the road,what will be the magic number for recapitalising the mortgage arrears epidemic ? whatever the magic number they ask for ,quadruple it and you’ll maybe be a 1/5th of the way there maybe ;)

  14. “The way mortgage arrears are headed in Ireland, it looks like only a matter of time before the banks need new capital. There will only be two places from which that can come. The money is either from the Irish taxpayers or the taxpayers in other European countries. The ESM is other European taxpayers’ loot.”

    The third way to get money is to bail-in all the depositors .All countries are set to raid the bank accounts of the depositors just as was done in Cyprus.

    If you do not want to be a direct contributor to the banking deficits remove all your assets from the banking system immediately. Cash. bonds , stocks and valuables in safety deposit boxes.

  15. bonbon

    I know somebody above mentioned Munhau above, but why not spell it out:

    Wolfgang Muenchau writes in todays’ FT, that potential loses of Eurozone banks can be anywhere between 1 trillion to 2.6 trillion euros thus making any discussion of using the ESM to recapitalize banks, or the European Commission to be the regulatory authority as next to useless. He estimates the balance sheets of Eurozone banks, with an error margin approximating the size of the economy of Italy, at 26.7 trillion Euros. Given the fact that the banking systems of Ireland, Greece, Spain, Portugal and Slovenia are carrying potential loss of between anywhere between 10 and 25 percent, and that the banking systems of German and other countries’ have hidden losses due to the foreign securities they are holding. Furthermore there are the “bad banks” which hold a full 5 percent of Eurozone banking assets. Another 5 percent from “hidden loses” one can come up with a figure of 2.6 trillion euros and even if you subtract the “Italian economy” you have 1 trillion. This makes discussion of whether the ESM pumps in 60 billion euros into the banks almost irrelevant. Without a governments “filling in the gap” it “barely matters whether the European commission will become the resolution authority or anyone else.

    I hope DMcW realizes the seriousness of this estimate. Without splitting off the trillions of toxic paper, there is not a snowball’s chance in hell of dealing with the debt and inaugurating a Hamiltonian Credit system. That is what Glass-Steagall is all about.

  16. cooldude

    Interesting article David. The comment that the Fed signaled a dramatic change of policy last Thursday doesn’t really stand up to scrutiny. All that Bennie and the inkjets said was that they would “probably” taper their bond and toxic mortgage backed crap purchases at some stage. They call this their exit strategy which is total garbage. They were saying the exact same thing in early 2009 and they did absolutely nothing. The reason behind this is because the Fed are now by a long way the largest purchaser of treasury bonds and if they stop or even slow down their $45 billion of purchases every month there is no one else to step up to the plate and take over these purchases. This buying has accounted for 78% of total bond purchases so far this year and if it even slows down then interest rates will go through the roof. Despite your assertion that the Fed are deliberately pursuing a policy to raise interest rates these guys know only too well that they simply cannot afford any serious rise in rates. Every 1% rise in interest rates costs them over $160 billion extra on their $16 trillion debt. The real reason that rates are rising is because the great bond bubble is now starting to unravel before our eyes and the smart money is getting out early.This will end very badly.

    An interesting side effect of all this is happening in the $200 trillion interest rate derivative market. The recent 5% rise in rates means someone has lost $10 trillion in this casino/market. As rates continue to rise there will be very big casualties in this market. This will also end up in a total mess.

  17. http://www.youtube.com/watch?v=YR505LR5XcU

    Iceland’s president says let the banks fail and the economy recovers. Too simple for some.

  18. “More likely, and a better bet now, is that the cost of further recapitalisations could be met by the ESM with real money”


    It is time to learn your lessons on what real money actually is instead of providing further misinformation.

  19. “But why is your income falling? It is because someone else is not spending. After all, my income is your spending; and your spending is my income. So your income falls because my spending has fallen and my savings have risen.”

    It could be nothing to do with savings, David. You do not spend because you are too far in debt and have no money left and have no savings.

    It is the debt trap and the debt suffocation of the economy David.
    In any event most peoples savings are already deployed in the bond market and spent by government or major corporations or in the stock market and used as capital to run businesses. It is likely incorrect (although admittedly I have no figures) that savings are largely held by banks and not loaned out.

  20. “Without fresh credit into the economy, income falls further and arrears rise, which is why the latest Central Bank figures show that ordinary people are slipping further and further into the mire.”

    This idea of requiring credit to stimulate the economy has got to cease. Credit is defined as debt. Credit is a liability. You propose that increased borrowing and further indebtedness will improve the situation.
    Totally bizarre.

  21. Good article Sir

    I am surprised not to hear you mention the Anglo Tapes as the story is plastered all over the Indo. Fionnan Sheehan wrote a good piece and after hearing the tapes he appears to be raging with anger. He looks like a chap who is barely in control of his contempt at the best of times and I can’t blame him

    He believes the country is heading for decades of penury and so do I because the content of these tapes suggest that the vultures in the banks are criminally insane and need to be locked up and re-educated into how civil society is supposed to function. Politicians and regulators can’t control them and they now have supplanted the church in being the bully who is tightening the vice

    Locking them up would be moral and it would give them time to reflect on that beloved phrase of theirs : ‘moral hazard’.

    But apparently we all have sunk much further than having just blown the house keeping money. Yes! Apparently we are now a bunch of pagans too!

    Yes all you people are pagans and the bishops reckon you became corrupted and sold your souls to the devil during the boom. So much so that the bishops are plotting a comeback tooled up with Evangelisation and ‘re-education’

    We all need moral ‘re-education’ apparently. Imagine that
    Perhaps ‘re-education’ works both ways Mr Bishop (Dad!)

  22. “Such a deal could be executed by a large debt-for-equity swap whereby the banks take equity in the house and reduce the mortgage accordingly.”

    That is what a mortgage is. A debt for equity swap. In the underwater houses there is no homeowner equity left. The banks already have it all and then some. All they need to do is foreclose to take possession (Assuming they still have ownership of the mortgage document)

    Either you are confused or I am. All this social engineering does not work so let the chips fall, the failures take place and lets get on to new business, wiser, sadder and poorer.

    Same treatment for the banks too. They can’t make the payments either then let them fail as did the Icelanders.

  23. http://www.crown.org/library/ViewArticle.aspx?ArticleId=314

    Debt Jubilee of 7 years was because the maximum length of a loan Jew to Jew was 7 years. It was otherwise with dealing with a Gentile.

    “Now it shall be, if you will diligently obey the Lord your God, being careful to do all His commandments which I command you today, the Lord your God will set you high above all the nations of the earth….The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow”
    (Deuteronomy 28:1, 12). Borrowing is never God’s best for His people.

    • dwalsh

      Hi Tony.
      I wonder have you seen Bill Still’s documentary ‘The Secret of Oz’?
      He has a lot to say about the notion of gold being used as money.

      • Not for a while Sir Dwalsh
        I’ll refresh

      • Hi
        just spent the last two hours watching the film.
        It is of course about much more than the initial comments on gold but about the complete control of the money system by the banks to the total detriment of all people.

        Bill Still indicates the gold standard as being the monetary use of gold to the exclusion of all other forms of money. That is the first time I have heard that use . There are many statements about gold standards and it turns out many definitions of gold standard.

        This is totally confusing and probably deliberately so. Confusion causes doubt and misunderstanding and so we argue among ourselves and waste our energies while the business at hand goes unnoticed.

        IMO a proper gold standard uses gold as the measure of all else. That includes the unrestricted use of all kinds of money that is evaluated by the users. such that people will choose what suits them the best. For example silver and copper coin would still exist and local currencies would appear and disappear.

        Bill Still main project is to do as I have long advocated.
        Destroy the banking cabal but allow the commercial banks to operate on a proper business basis. No debt money and no fractional reserve lending.

        Issue money from treasury
        Use it to pay off (replace) the fiat bank money)
        Repeal the legal tender laws that allow people to contract in any form of money they wish
        Ban the central banks
        Ban fractional reserve banking
        Allow the free use of any money.

        There is the issue of inflation. When money is easy to produce and replicate then there is a tendency to get too much money into circulation. Expanding the money supply IS inflation.

        A wise people will use a money of limited supply. It is mathematically proven that it is not a requirement to expand the money supply in order to have a growing economy.
        It is the tampering with the money supply that causes booms and busts and allows the bankers to manipulate the economy. It is ably described in the Still documentary.

        Bill Still misinterprets the yellow brick road analogy. It is not a road to be avoided but as demonstrated by Dorothy the road to freedom from the wicked witch. Travelled on by wearing silver shoes. (Gold is the basis, silver the currency)

        The characteristics of good money include.
        It is indestructible
        A storage of value
        It is easily divided
        It is fugible (recognized and valued by a large sector of the populations.)All pieces of money are equal to all other like pieces.
        Has a large worth for a small volume.
        and has to act as a medium of exchange.
        And be usable electronically in this day and age.

        gold passes the above test with silver a close second.
        nothing else comes close.

        Paper money issued into existence by the government can work but needs a control mechanism to prevent the expansion and contraction of the money supply on a whim by anyone who fancies to do so. That is why paper money needs to not be money on its own account but to represent an amount of money in existence. i.e. you can write a cheque for money in your account but if the money is not there to cover the cheque it is fraud. Likewise a government paper bill must have an underlying asset to back it.

        Business can be conducted by the use of real bills and does not require money per se but only at the end of the process for the final accounting and settlement to balance the books.

        The only money currently in existence that is not debt based are the coins in your pocket. so no harm in having silver and gold coin which will allow a paid up asset to be transferred one to another rather than the current debt based interest charging paper money we currently use (included all the digital money too, flying around the world )

        I recommend watching the Bill Still documentary, twice at least or take notes and use the pause button a lot.
        Then study gold as money.
        Study the various interpretations of the gold standard
        Then study the characteristics of money and what is considered the best money and study our current money to see how it compares with the “best” money.

        By then we will have an understanding of the problems we face and some idea of how to repair ourselves.

        Looking at Iceland is a good start in that regard I would say.

        All else is froth upon the stormy oceans of world financial slavery/

        • michaelcoughlan

          Hi Tony,

          The main message is WHO CONTROLS the quantity. Still advocates using gold to back a currency not necessarily as the actual currency itself which is what I subscribe to. Good currency like gold will be driven out of circulation by bad currency like coin in nominal metals. Better to back a useful currency of no intrinsic value with gold.

          The other point is the fact that governments can issue currency debt free. Not like the fed.

          • Adelaide

            Hi Tony
            As far as I can recall, Bill Still in the ‘Oz’ documentary comprehensively rubbishes the concept of a gold-backed currency. Indeed, L. Frank Baum wrote ‘The Wonderful Wizard of Oz ‘ as an attack on the ruinous gold standard in use in his day, advocating for a more accessible silver-backed currency. In the documentary summary, does Still not demonstrate the foolishness of advocating ‘Commodity Money’ with historical fact and logical argument, that what backs money is the people’s faith in it and that is all that is required, backing it up with a scarce commodity is a retrograde and ruinous step.

            You are incorrect to say “Bill Still misinterprets the yellow brick road analogy. It is not a road to be avoided but as demonstrated by Dorothy the road to freedom from the wicked witch.” It is to be avoided.

            For those unfamiliar with the analogy behind the book: The ‘yellow brick road’ (gold) leads to the Emerald City (the greenback) overseen by the Wizard (the U.S President) who resides in his Palace (Washington). The four characters, the Tin Man (industrial workers) the Scarecrow (farmers) the Lion (their elected voices/Politicians) and Dorothy (housewives)journey there for salvation (economic salvation)and are ensnared by the Wicked Witch (commercial banking) but are aided by the Good Witch (co-op banking). The Emerald City and Wizard are exposed as deceptions and can offer no (economic) salvation as the characters requested. The yellow brick road (the gold standard) led to failure. Instead the characters find it in themselves to save themselves. (L. Frank Baum was a political activist and this is the moral of the book, his rallying cry that the People must wake up and take it upon themselves to fix the system, for as presently and as always only they have the power within themselves to save themselves). Finally, Dorothy clicks her sliver slippers (they’re ruby in the movie) which signifies the overthrowing of the gold standard currency with the new silver standard currency that L. Frank Baum had unsuccessfully campaigned for.

          • Adelaide

            Hi Tony
            In follow up to my comment below I revisited the conclusion of the ‘Oz’ documentary and as I recalled, yes, Bill Still comprehensively rubbishes the concept of returning to gold-backed money.

            “Be prepared to deal with the modern day gold-bugs, their arguments divert us from the real question” Bill Still

          • Hi Michael

            As regards quantity of money.
            Having anyone at all controlling the quantity of money is the major mistake.
            The money supply , ideally, should be static or nearly so.
            Expanding the quantity is inflation as I said and then , of course, the reduction in quantity is deflationary and the cause of depressions
            Metallic metals should have no denominated value but only the weight and purity. Then they will always transfer at market values. The market value will adjust as necessary.

            I mentioned treasury notes , debt free, issued without interest.

            I am sure we would come to understanding of a mutual kind if we had a 10 min chat to clarify points!!

          • Hi Adelaide

            Yes he rubbishes Gold as you say, but he is wrong
            “In the documentary summary, does Still not demonstrate the foolishness of advocating ‘Commodity Money’ with historical fact and logical argument, that what backs money is the people’s faith in it and that is all that is required, backing it up with a scarce commodity is a retrograde and ruinous step.

            He has opinion but no evidence.

            Gold is not the problem it is the way it is used. If designated the only money it is deliberate destruction of the idea og gold as money.
            Banning silver as money, f done as he stated was wrong.

            No Money should be banned. There should be free choice by people to use what they wish.In some countries people even accept US paper money!!!!

            You are correct that people must have faith in the money. Ultimately people lose faith in money that is constantly devalued by being always printed. They will again and all fiat paper currencies in the past have failed and there is no evidence they will not fail in the future.
            40 years is the average lifespan for such experiments and taking 1971 as the starting point we are in year 42 now. I give us 2 more years max.

            I would suggest that following the yellow brick road lead to the solution and freedom from oppression and the freeing of the silver currency. Without following TYBR there would be no freedom.

            The west has abandoned gold and silver and proper money but the East has not. I reserve to observe that recently even the western banks are accumulating gold. Central banks are now net buyers rather than sellers of 400 tonnes a year.

            Gold Bug is a derogatory term and I am always cautious of people who use language rather than argument.

        • dwalsh

          Hi Tony

          Thank you for your thoughtful reply.
          I want to reflect on what you and Bill have to say.
          More anon.


          • Adelaide

            By that logic
            “Gold is not the problem it is the way it is used.”
            one can equally say
            “Money is not the problem it is the way it is used.” or in Bill Still’s argument , “Money is not the problem it is the way it is issued, by whom and by how much, fix the ‘by whom’ and the ‘by how much’ and you have a viable currency.”

          • Adelaide you are correct.

            The only money not easily manipulated is gold and silver in relatively fixed supply. It avoids the boom and bust of inflation and deflation of the currency.

            There are different forms of money that suit different people. Repeal the legal tender laws and allow people the freedom of choice.

            Remove the cabal of central banking and their monopoly on money production. Release the controls on money to be rid of the distortions.

            Do not ban forms of money and do not advocate a particular money. Let people get the best money they can as they do with any other commodity.

    • Colin

      Thanks for that clarification Tony.

      There’s a huge difference between what the Bible says on this matter and what misunderstanders of David McWilliams believe to be debt forgiveness.

      So, even if you were living in the Deuteronomy era, you would not qualify for debt forgiveness because;

      1. You are Irish, a gentile, so you do not qualify for 7 Year Debt Jubilee as you are not Jewish.

      2. You signed up for a 25/30/35 year mortgage, which greatly exceeds the 7 year limit, so therefore do not qualify.

      I do think there should be some form of debt forgiveness, but allowing someone to live beyond their means should be prevented.

      • cooldude

        In Iceland they simply wrote off any mortgage debt which was in excess of 110% of the value of the property. This is the type of action that has to be taken. The debt that cannot be paid must be liquidated one way or another.

        • paddythepig

          That’s palatable if the amount being written off is, say, no more than 20% of the total. But if you start going above that, and it gets worse the higher you go, you are looking at welfare for a sense of entitlement which at it’s core feels deserving to live in a certain type of house, and in a certain type of area.

          Above the 20%, far better to get folks out of the house into more modest accomodation. Someone else can then commit to a purchase of the original accomodation at a more realistic price, and then pay for it all.

        • bonbon

          Iceland applied Glass-Steagall. Discussed it at length. But it is only step 1, aspect 1. The other more important aspects are Hamiltonian Credit (which DMcW is heading towards) and massive huge global projects because the economy is shattered.

      • In Glasgow years ago (1930s) there were many Jews, Lithuanians, Irish, Italians and Poles. All sorts. If someone was bullying these people it would soon be sorted out because we had people who would always take a bully out into the street and give him a bloody nose in a stand up fight. It was a fact of life. Leave the kid alone!

        Such victims tended to later follow the team who welcomed everyone and there they found a home a called it Paradise. I am proud that they are my team

        It’s time we had a discussion about biblicism, jewery and zionism because that is where all the fingers are pointing regarding most of the upheaval in the world. As usual the jews are getting a bad press and everywhere you go you find people either saying nowt or letting rip with their opinions

        It’s fascinating how a tiny tribe can apparently wield such enormous powers and command the the highest positions in all the important agencies. Something has not been right since Kennedy died. Yeah I know he was a perv and his clan were a fucking disgrace but they were controlled by Meyer Lansky. Lansky knew that electing the Kennedy’s would be ‘good business’ because their delinquent tendencies would ensure that Lansky’s black book would pile up heavily and never be short of owed favours for services rendered

        The idea that Kennedy was the last president to have the balls to stand up to them must surely rankle with many thinking Irish people. Kennedy was impotent because he didn’t hold the moral high ground. He wasn’t up to it but was too proud to realise it. That is why is why they took him out

        All the RTE fawning over Obama was interesting yet he is the most oppressive US president in history. The US is not what it once was and there is point in looking over the water for any sense of Irish pride and identity because you not find much to be proud of believe me

        Would you want to be associated with what has become a corporate police state run by gangsters who commit crimes with impunity?

        And still Irish people think Amerika is the land of hope and freedom. The womb of capitalism. The uncritical arse licking is sad beyond compare but it always goes unnoticed because most people don’t care

        The Fed and the markets are run by jews. The politicians are bought and paid for with jewish money and everyone knows it yet we are supposed to just keep out traps closed and never criticize them for fear of being branded ‘Anti Semitic’. I’d like to hear Clare Daly on this. I am sure she would let rip with both barrels and rightly so

        It’s all a toxic lie and these psychopaths who exploit the jewish faith and hide under the umbrella of it’s respectability are an insult to religious jews and are fakes and charlatans. Learn the difference between judaism and zionism and then you will get the picture. There are many jews who hate zionists with a passion. Gilad Abu!

        It is not so easy to analyse the Irish tribe and their role in world affairs. The reason is they don’t matter and the Irish a very simple people at heart. All it takes is a smile and you are chatting and if they sense you have money they will always kiss your arse. They are like whores

        They will kiss your arse so much that they will deny that zionism exists while being content to see zionsim at work in their own country.

        All those millions of supposed cash buyers waiting to move into respectable South Dublin homes are the Irish zionists waiting to until the land is cleared of the disgraced and the dispossessed.

        It’s zionism in Ireland. Pure and simple

        Get the fuckers out and let morally the superior vultures in to clean the area up with their new sense of superiority and fresh morality. That’ll show em. Get the fuckers out and put them in their place

        That is what this argument boils down to. The Irish capacity for small minded selfish nastiness is unparalleled. Anywhere

        • bonbon

          Tell the truth about Zhabotinski, and then it makes sense.

          And remind Irish that the one and only time Christ lost his temper was with the money-changers in the temple.

          It probably began to look line a Mithra temple of Babylon!

          We have hard won nation states now, Glass-Steagall means don’t get mad, get even!

        • Colin

          Yes, you see, you don’t see many jewish drunks or drug addicts. They don’t waste time following sport. They place a huge value in education, and I don’t mean degrees in womens studies, they study medicine, science, engineering, business and law.

          If you envy their success, try to emulate them maybe, don’t stay bitter.

          • Adam Byrne

            Yeah, sport my arse. Total waste of time.

            A child’s pastime to play with friends and keep fit.

            Stick the Lions tour up yer arse people.

          • Adam Byrne

            My uncle was Jewish and worked his ass off all his life to provide for his family and what a lovely geezer he was, RIP.

          • Adam Byrne

            As someone who played professional soccer for a while, I can attest that grown men taking sport too seriously is a vacuous waste of life.

          • Do not the Scots exemplify what small nations are capable of?

            We are a nation with a proud history and the world looks on us favourably because it has the sense to realise that there is a huge difference between these small fiefdoms that make up the British Isles

            Scotland is not England and they are strangers despite all the claptrap about being inbred

            Our discoveries and inventions are a true marvel of what a small nations can accomplish. Inventions. The Enlightenment etc

            Our record proves we are serious thinkers and inferior to no-one but like the rest of the western world we have reduced ourselves to accepting shocking levels of poverty that is far worse that anyone can remember. We are on a fast track to feudal backwardsness

            Out slum heritage is a nightmare no-one wants to see it return yet it was such poverty that bred men like Brother Walfrid, James McGrory and Patsy Gallacher

            It’s just that we let our record do the talking and we don’t need to oppress anyone else to force our cause. It’s the Glasgow Celtic Way. We do our talking on the field

            The Scots have a far better track record in kindness to animals and to humans than the barbaric Irish savage capitalist animals. 800 cases of animal cruelty in Scotland per year compared to 32,000 in Ireland

            We learned through the Highland Clearances and never forgot the message. We didn’t whine like the Irish and just got on with Capitalism and we fought two bloody world wars and paid the price with up to a dozen deaths in large Irish immigrant families. We were fodder and did our bit for the free mason king and his idiot capitalist cronies and their delinquent sons

            This is Our Land and not Your Land

            Next time there is a war let Price ‘Arry lead the troops into battle!

            I will never fight nor ask my family to spill blood for any freemason king. Never.

            Over my dead body

            Some of my Irish Brothers might attend the funeral although I imagine not.

            I’d jump out and scream that Ireland and Scotland will forever be prisoners as long as they are treated as mere fiefdoms by those wankers across the water

          • They don’t follow sport. Big deal. Maybe they are just plain anti social? Many Irish people value education. Education is one of last pillars of the nod nod wink wink culture in Ireland and is a barometer of false snobbery. Same as Israel

            You can have a degree and be an idiot but be handed protection on a plate if you know and kiss the arse of the tribes

            The fact is Israel is a failed state and compete fuck up and disgrace by any human standards

            Their walls of hate prove they are a screwed up failed state

          • I’d wager that that there are a sizeable percentage of jews who are well screwed up

          • Colin

            Eaten bread is soon forgotten. Once you press the Pride button, you’re setting yourself up for a fall.

  24. 5Fingers

    The Indo Tapes make the issue of moral hazard irrelevant when Europe wakes up to the reality that Anglo and possibly the rest of the Banks here were fully aware that the German taxpayer would be the ultimate payer. Singing “Deutschland Uber alles” as the Guarantee was blatantly rifled will certainly get their attention.

    We are a mockery of what representative democracy is about. It represents only those in the know and with the pull. Enda empathizes with your pain and no doubt will be given the excuse to given another 100 Million or so to our legal eagles as they use crocodile tears wincing out hollow arguments that’ll reveal nothing or make anyone more accountable – The Irish remain fatalistic simply because they know nothing will come of it. We are a laughing stock.

    I am glad the IMF are calling the shots. They are the ONLY ones asking awkward questions. Many our German friends (I believe they are the best friends we can have right now) will start insisting on some answers as well. Like…how come we did not hear of this earlier, who else is on those tapes?

    I have one fear that FF may have a get out of jail card – they can claim they were deceived. But I do hope they will caught on being incompetent. What is not clear though is what the Central Bank really knew during FF’s watch. Lots and lots of awkward questions from our European bailer outers or what?

    • Adam Byrne

      Laughing stock indeed.

      This so-called ‘country’ (probably better to take out the letter ‘o’) is an absolute disgrace.

      If I cared about nationality I’d probably be ashamed to be ‘Irish’ but luckily I don’t care about it.

    • Joe R

      Is the story playing abroad? Not that I can see.

      I think the bare figures and context – 30 billion euro loss in such a small bank in such a small country make it clear that governance/regulation simply went missing. I think that was established early on in the saga. By dragging out we look like bigger idiots.

      I don´t think anybody else will ask question we are grown up boys and girls we should be able to do that for ourselves.

      • paddythepig

        The funniest thing about it all for me, is the sight of Fianna Fail trying to capitalise politically on the situation, by stating how reprehensible it is, and then looking for immediate enquiries into it.

        Puke-worthy stuff.

        Trying to make out it was all the evil cabal of bankers that caused the problem, and that they had nothing to do with it. The poor chaps, they were victims, they were tricked.

        Dear Jesus.

        They had everything to do with it. I never heard a single word from them when the country was being flooded with money.

        By the time Anglo executives were singing ‘Deutschland Uber Alles’ on the phone, the game was well over. The real damage was done in the previous 5 years when especially FF, but also large portions of the Irish people participated in, facilitated, clapped and cheered the madness.

        And FF still joint top in the polls.


        • Joe R

          FF have a zombie vote that will always turn up. Can´t see it getting much bigger unless Kenny mucks up even more.

          Actually just thinking about that some more I am not so certain…

          But for me it will be interesting to see where SF and that United Left bloc get to eventually.

        • Colin

          The Soldiers of Treachery and their supporters haven’t gone away you know. They are embedded in safe and cushy jobs, immune from the threat of emigration. The got those jobs because they go out on the ‘canvass’. They do not engage their minds in to consider the calibre of the Soldier of Treachery.

          • It’s time we had a debate about this weird fucked up tribe just for the record. To think that in 5 years time they will be sitting on Vincent Browne defending whatever the policies of the day are in 2018. Hopefully VB will have retired as I am amazed he is still taken seriously and can be hoodwinked by small political gangs who number 30,000 at most

            Sure it would only take a few hundred serious volunteers to take the fuckers out

            The man is in debt and can’t be trusted. He is tainted with moral hazard and it follows that he simply can’t be trusted to tell the truth. If a comrade can’t be relied on he has to be pensioned off. You know the story. Go away, be quiet and keep schtum

            It will be the same old. No-one will be accountable and they will still be moaning about their failed state, licking ass and making ‘documentaries’ about the scourge of travellers. Grown up children will still be putting their hands up asking ‘Pat! Pat! can I ask a question please”

            That Caribbean land of Adams sounds like paradise now and I am coning round to the idea fast.

            It is my prediction that in 2018 the Irish will be just as fucked up and clueless as they were in 2008 and 2013. Sorry Irish Brothers but you all know it’s true and I defy you to dent it

            I have a decent grasp of the Irish character but even after 48 years I never fail to be surprised at the depths they will sink to.

          • Adam Byrne

            I agree with your prediction for 2018 Paul. This place is finished.

          • Colin

            If only Vincent had sold his AAA status South County Dublin pad in 2007, he would be on the pigs back now. He didn’t see the bubble inflating or bursting. That’s a damning indictment on him. But you’d like him to stay in Dalkey, South County Dublin, wouldn’t you? You don’t wish to see anyone including the rich, famous and influential turfed out of the lap of luxury if they can’t afford it anymore?

          • Colin

            Joe R,

            Pauldiv claimed Vincent Browne is broke. Maybe he is, maybe not, but if Vincent Browne was as smart as he likes to think he is, he would have sold his house in 2007, he would have got maybe €5m or more. He could have paid off all his debts and bought a nice smaller comfortable less affluent pad and had some money left over for some roast beef and claret until the day he dies.

            Do you now know what I’m on about?

          • Joe R


            Would you stop making up numbers and dates just to engage in a bit of badgering?

            The value in the article put 3.25 million euro not 5 million and Village existed between 2004-2008 and closed with 1.5euro million of debt owed in late 2008.

            Browne had no reason to sell his home in 2007. Can you give it up?

          • Colin

            Joe R,

            Browne sold his house in June 2011, 4 years and 4 months after the market had peaked in February 2007, look it up if you don’t believe me. In that time, average prices fell approx 40%, but high value properties were falling by greater percentages, like 50%. Again, do some homework if you don’t believe me.

            All I said was that Browne could have realised the full value of this in late 2006 / early 2007 and put the cash in his bank. He would have got €5m in my opinion. You see you can sell your house anytime you like, not only when you need to pay off debts.

            Why this is so difficult for you to understand I don’t know.

            All the best,

      • 5Fingers

        Joe R. I think what it shows is that this was not incompetence or immaturity in action. This was theft and when it does look like we cannot manage it, I expect any deals on debt rescheduling will be off.

        • Joe R

          5 Fingers,

          It shows that alright but I think that is known anyhow. i am surprised they let themselves be taped. But The doctrine of too big to fail didn´t start in Ireland or in the US in 2007/8 it existed a long time before that.

          For example on p.40 of `Economics´ by The Economist, originally published in 1999, there is a whole section entitled “Too Big To Fail´´ in a chapter called a “Plague of Finance`´ warning against this “pernicious doctrine´´ as they put it. There are many more examples of where obvious warnings against `too big to fail´ could be found in general economic discourse.

          We pay people to know this stuff and act. They didn´t. They still have jobs and pensions.

          And it wasn´t theft in reality – Anglo asked for the money and the gullible Lenihan & Co. handed it over – and thought it was a good idea too. It could be seen as fraud possibly. The State has its responsibility too, in so much as its regulators, civil servants and politicians just went ` ah sure grand so´. And ultimately the people too.

      • cooldude

        Here is an article from Global Research discussing the Anglo criminals and some other stuff. I’m not too sure about the mainstream media as I stopped following that propaganda a long time ago. Quite a good article from an excellent source of real news

  25. michaelcoughlan


    Off topic but very important observation re gold. Jim rogers is the guy who set up the quantum fund with George Soros.


    • bonbon

      Which went bankrupt with the LTCM blowout, 1998, the mother of all bail-out’s. And the trigger? Russian GKO BONDS default by Russian Premier Kiriyenko. Imagine what fun we could have with “burn the bondholders”!!!!

      Ehem, Now, Tiger, show some respect, that was the Queens personal fund, Soros the Royal running-boy handler. She was not amused, so the world must pay. Ehem!


    The jokers on the Anglo tape kept their jobs for 2 and 3 years afterwards ! Having destrotyed First Active, Cormac Mc Carthy slid onto the Paddy Power board, NO ACCOUNTABILITY for overpaid lending managers.

  27. Wills

    Told you so : http://www.independent.ie/business/irish/abuse-the-bank-guarantee-dont-get-caught-david-drumm-29369275.html – Anglotapes

    The crisis was engineered by insiders running the banks.

    I was right.

    • good start. How do we fix the current problem now exposed to daylight scrutiny.

      • michaelcoughlan

        You can’t fix anything at this stage. You must prepare your own life boat and let the bastard go down with most but not all hands and start fresh.

        Help those of like mind if you can but don’t dissipate your energy on apes who are too limited or ignorant or fearful to wake up and smell the coffee.


        • Well there are courses of action to be followed.

          chances of it happening are next to zero.
          If politically lead will cause an assignation.
          Must be lead by a change in the people themselves.
          Iceland as now repeated is an example.
          National referendum resulted in throwing out the toxic bank losses rather than socializing them.

          Personal education is the key and enlighten others if you can.
          You are better prepared than me as I have yet to get my piece of land for sustenance.
          My time line is getting shorter. May be months rather than years.

  28. joe hack

    I Told Ya So!

    Bubbles and fiat money were manger delinquent’s group-think college collaboration.

    World hegemony bowing to the insidious USAs Wall Street…

    Police the banks – love or loathe it the banking union will happen.

  29. 5Fingers

    David, the primary reason why your argument is at best naive is because the national integrity which is meant to support a proper currency and debt management system is completely compromised even at a global level. In a looney asylum run by psychos where reason and compassion have no place. But surely you must know this.

    A little note on our rating agencies from last week (S&P and Moodys etc)…http://finance.yahoo.com/news/the-last-mystery-of-the-financial-crisis-154447818.html?page=all

    The individuals are clearly detached from reality (one of the clinical markers for psychotic behavior). One wrong word from these guys and 100s of 1000s suffer and/or die.

    It is easy to see why this “detachment from reality” can be seen as a compelling aspect of the “Metallists” argument. Sound Money means money with sound foundation. Even if you brought in Pecora or GS, what would you apply it to? There is no foundation to speak of. It would be like applying plaster onto a wall of sand. Still, the majority holders of metal are mostly bankers anyway, so nothing changes.

    There is no democracy anymore. Vanished completely about 30 years ago We have financial moguls and their legal acolytes and the world looks on enthralled because a comfortable and easily threatened majority can still maintain their repayments for a shallow existence.

    • Very little gold left in western banks. Its moved Eastward rapidly.
      Barely 30,000 tonnes out of 165,000 tonnes is held by Western central banks (or close to half of that as it is sold, but there is too much secrecy to actually know).
      That is a little over 18%.
      The majority is in private hands.

      The percentage used as money would be self regulating according to price and economic activity. Self regulating in fact. Rather like a reservoir feeding a cistern. Always enough in the cistern to do the job.

  30. goldbug


    HA HA HA … HA HA !






    HA HA HA.

  31. In any other business it is call price setting ad collusion and is totally illegal.
    Same for the daily price set of the gold and silver by a handful of bankers behind closed doors


    • bonbon

      Bail-in and bail-out is illegal, but there is always a Carl Schmitt judge to make Special Enabling Powers legal. Where have you been?

      • Around the block 3 times at least. where have you been?

      • It would appear that any depositor has loaned his money to the bank at interest receivable has handed the money to the bank for their own use.
        It is immediately a bank asset to with as they wish.
        The depositor is now an unsecured creditor and so at the bottom of the list in the event of a bankruptcy.

        hence the requirement for a government guarantee to persuade people that the banks were safe.
        Just one more thing to ban.

        So if the bank is in trouble they seize the assets and the savings are gone.

        Quite legal as far as I understand. Bailouts are legal too. Simply an agreement between consenting adults so to speak.

  32. bonbon

    DMcW, I’m afraid you have been upstaged by the Anglo revelations, behind the curve, or actually shock wave, something your economics mates cannot comprehend.

    The simple reason is the failure to concentrate on the banking system, splitting it, Hamiltonian Credit. It is a high price to pay, but these are high stakes.

  33. bonbon

    The Anglo Elite tricked the Irish people and the state to protect their failing bank.

    This is worse than almost anything so far. And we have seen nothing yet!

    Time for a Pecora Commission! Pecora, son of an immigrant shoe salesman, put JP Morgan on the dock in front of camera’s in 1933!

  34. Harper66

    Kenny tells the dail the gardai (and so one can conclude the government) have had access to the tapes for FOUR YEARS! fucking hell. This government must have had knowledge of these tapes since coming into power in 2011. Why has it never acted on them?


    Kenny also rejects the option of an independent banking enquiry favouring instead an inhouse enquiry. Why?

    – to quote a tweet from Shane Ross -” …Enda proved at Leaders Qs politicians incapable of independent inquiry.Must be independt of Oireachtas.”

    • Of course they knew about it all along.

      Don’t try and fake surprise because it diminishes your intelligence.

      I knew it, you knew it and so do most people with a brain.
      It’s old news that is only now being made public to suit someone’s agenda.

      You are being led on a chase up the lanes. As DMW would say it’s time to snap out of it

      Don’t believe a word of their bs. On here we are usually 5 years ahead of the corrie brigade

  35. Busted flat in Baton Rouge,
    Waiting for the train

  36. Harper66

    On the topic of what is facing those in mortgage arrears –


    • whatamess

      well worth the read,thanks Harper

      “..the moratorium from 12 to ONLY 2 months ?!”
      “and the removal of the cap on unsolicited phone calls”…what a sham ! The ordinary Joe just doesn’t have even the sniff of a chance,eh:(

  37. http://www.goldmoney.com/gold-research/james-turk/mid-year-gold-market-review.html?gmrefcode=gata

    So the outlook for gold and silver remains very bullish, and will continue to be as long as central planners intervene in markets, instead of taking the prudent course which is to return to sound money based on precious metals.—James Turk

  38. http://www.thedailybell.com/29300/

    “The article makes monetary policy sound scientific and the creation and application of central banking sound reasonable. In fact, creation and control of money is insanely controversial and downright deadly. The only lasting, rational solution is to privatize money – not hold more Congressional hearings on how the Federal government can reconfigure the system.

    Conclusion: US policymakers are probably getting ready to do something about the current system, which is fast eroding. A main challenge, among others, is to make us believe that what they have in mind is logical and rational. But it won’t be.”

    Ridding us of central banks is not such a bad idea!

  39. 5Fingers

    From the IT today…maybe the Germans might save us the bother of an enquiry…The Frankfurter Allgemeine Zeitung puts its traditional restraint aside in today’s edition, recommending that former Anglo executives are put in a “big sack” along with all shareholders, creditors, members of the last Irish government and relevant members of the Irish Central Bank and Irish and European regulatory authorities.
    “Then one hits the sack with a club until the screams of pain are unbearable,” it advised in an editorial. “Afterwards, all decision-makers in Europe take citizens by the hand and assure them that a debacle such as that of Anglo Irish Bank will never again be permitted.”

  40. “But why is your income falling? It is because someone else is not spending.”

    Actually David as we discussed income is falling because as loans are repaid to a bank the money that was in people’s current accounts no longer exists.

    “This process means that the banks simply sit on deposits and don’t recycle cash through the economy.”

    But as you know banks don’t lend other people’s deposits?

    • 5Fingers

      There is an obligatory claim on your current account for debts outstanding. So it is not like you can spend it as you like unless you are like the Anglo lads who never pay anything back.

      And you also destroy money plus put more out of reach by paying interest which now represents the majority of debt resettlements at national level due to decades of debt rollover or kicking can down the road

      Bankers are merely a damper by mopping up productive money as interest payments – little of which goes to reward depositors or reinvested.

    • I do not think it is that simple. One can have half the money in circulation but double the velocity to retain the same economic activity.

      Also after paying off the debt there is still the interest to pay too. currency to cover the interest was not issued at the time of the loan so the payment of interest has to come from someone else’s principle.

      There is now so much interest in the economy to be paid that there is little money left to circulate for other purposes. It is a liquidity trap and debt suffocation of the total economy.

      The current debt based system must be abolished before it completely collapses to avoid a systemic breakdown.

      Money must be issued debt free form treasury at no interest.
      It must be backed by a commodity of limited supply to restrain over issuance of currency.
      Legal tender laws need to be abolished to allow free competition and free choice in currencies.
      There must be no state or bank control of currency and the central banking system must be abolished.

    • bonbon

      What do you call bail-in then? It is now standard EU and US practice, Cyprus was the template.

      They are going after personal deposits. Something in your monetary theory sounds like banker-arithmetic.

  41. bonbon

    A sensible approach, as usual upstaging :

    MP Tapsell tells Osbourne: Restore Glass-Steagall

    BBC reports: Chancellor warned of ‘another banking crisis’ unless Glass-Steagall is restored

    A Conservative MP and former fund manger has warned the chancellor of a second banking crisis unless the government properly separates high street banks from their investment arms.

    Sir Peter Tapsell made the plea during Treasury questions on 24 June 2013.

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