June 27, 2013

How the banking collapse turned into a dramatic hostage crisis

Posted in Banks · 187 comments ·
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The brilliant English economist John Stuart Mill, writing in the 1860s, noted that “a crash doesn’t destroy wealth, it merely reflects the extent to which wealth has already been destroyed by stupid investments made during the preceding boom”.

Mill’s way of looking at financial crises, examining the period well before the bubble burst, when the boom masked the progressive destruction of wealth, remains the most constructive way to look at any financial crash, including the great Irish banking/property crash.

Let us not forget that every bank in Ireland went bust. It didn’t matter whether the banks were locally or foreign run and owned. They all indulged in reckless lending and they were all bailed out.

To date there hasn’t really been a satisfactory answer as to how exactly this happened deep inside each bank and why there didn’t seem to be even one dissenting bank. Nor is there any real answer as to why the Central Bank and the regulator ignored all the warning signs, or why those few who did warn and publically stressed the dangers of all this reckless lending were scorned and vilified.

The endgame of banking crises all over the world, if nothing is done in the boom to slow down lending, are bank collapses. These meltdowns are caused by bank runs. Those at the bottom of the queue – depositors – will lose everything without somebody plugging the hole in the banks.

The lesson from both the Great Depression and the Asian crisis is that a bank run is much more damaging to the economy, to employment, confidence and income than even the shock of the crash itself. The loss of deposits eliminates the wealth of the middle classes. If you doubt this can happen even when banking crises are managed, consider what has just happened to Cypriot depositors.

In recent years, the notion has been raised – at ECB level – that depositors are “lenders” to the bank and therefore, when banks wobble, the depositor should expect to lose money.

But this is a terribly mistaken interpretation of what goes through a person’s head when they deposit money in a bank. Most people deposit money for safekeeping. You do this for the rainy day. Your savings are what you have when all the other bills are paid. It is your nest egg.

Yet, every time a loan was made, every time a bank in Ireland scrambled to extend money for some development or other, ordinary people’s deposits were risked because more and more wealth was being destroyed.

Deposits were not sheltered. Even after the Northern Rock collapse and the collapse of Bear Sterns on St Patrick’s Day 2008, neither the Irish financial regulator nor the Central Bank drew up a bank resolution mechanism to protect depositors in the event of a crash.

But how was the situation allowed to get so out of hand?

Bear in mind all the banks were at the same game. It wasn’t just Anglo. AIB and Bank of Ireland doubled their loan books in the three or four years preceding the crash.

The other banks copied Anglo’s lending approach by lending as much as possible, and they also followed Anglo’s funding model, by borrowing as much money as possible in order to fuel the binge. This is where the infamous bondholders come in.

Obviously, when lenders to the banks are confident of getting their money back, they are prepared to lend for long periods. But they began to panic, triggered by a property market crash, and demanded their cash back.

This mismatch between liabilities (what the banks owe) and assets (what the banks have lent out) is often why banks go bust. They lend out for very long maturities but they are financed by very short maturities.

So, when a crash comes, they can’t call in their loans (their assets) because they are illiquid and lent for, say, 20 years, but the people they owe money to (their liabilities) can ask for their money back the very next day. The fragile nature of a bank’s balance sheet means that wise and vigilant regulation is paramount.

Failure to oversee the system meant that when the panic came, the authorities were not faced with good and bad policy options. All the options were bad. It is a question as to which option was the least bad.

Once a banking boom leads to a banking bust, the entire drama becomes like a hostage situation. On the one side you have the kidnappers – the bankers – who threaten that if they are not bailed-out they will shoot the hostage, meaning the economy and the deposits in the bank. They threaten the authorities as follows: if you don’t do as we say, we will allow a bank run and your people will lose their savings and your economy will stall because your payments system will break down. The ransom is the size, type and duration of the bailout.

The government which has already suffered a monumental intelligence failure as the regulators and the central bank have failed abjectly, faces a choice: are the kidnappers bluffing or do they have a nuclear option which they are willing to use?

This is what the Irish Government faced in September 2008. It was a hostage crisis. And we know from the Anglo tapes that the attitude of the kidnappers ranged from the cavalier to the sociopathic.

While outside governments such as Germany and the UK may have said “you shouldn’t deal with kidnappers” or “we wouldn’t have done it that way”, in terms of concrete plans there was nothing coming from the ECB.

The guarantee was temporary to stop the flood of money leaving the country in panic. Once the panic had subsided, it ought to have been rescinded and followed by a resolution mechanism whereby bondholders were picked off one by one in an orderly fashion.

Why this didn’t happen in the subsequent months/years remains a mystery, particularly when it became obvious that the bankers were lying about the extent of the losses.

Would it have been a runner to do nothing in September 2008, call the kidnappers’/bankers’ bluff and risk a run on the banks where depositors would have lost everything?

The Irish banking crisis didn’t start in September 2008; it started years earlier when bank after bank abandoned prudence and risked everything for short-term profits and personal bonuses. It ended up as a hostage situation with kidnapper/bankers threatening the economy and deposits, leading to the state guarantee. This option was the consequence not the cause of the financial meltdown.

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  1. Adam Byrne

    Good morning.

  2. Reality Check

    The combo of Fractional reserve banking and central banking has the hostage situation described above baked in the cake.

  3. breltub

    The best regulation is the nuclear option. Forget your oversight and prudence outsourced to some bureaucrat who is selling you safety and taxing you for it, because over time that becomes diluted into once again becoming what it set out to stop. Corrupt crap.

    There should be absolutely no guarantee or tax money used to prop up a banking system, or any other failed business for that matter.

    Even if it means taking a loss on cash deposits.

    It’s harsh but fair, and everyone would play by the same rules. Much like no matter how absolutely stupid the driver in front of you is, it is your fault if you drive into him/her.

    Also, David you never bring up competing currencies. Imagine if Ireland had something like the WIR to get around bankers grabbing cash when their balance sheets melt.

    http://en.wikipedia.org/wiki/WIR_Bank

    • joe hack

      “There should be absolutely no guarantee or tax money used to prop up a banking system, or any other failed business for that matter.” (breltub June 27, 2013 at 10:31 am)

      Before 2008 there was none therefor you are making the argument for regulation enshrined in law.

      The banking union or other such regulation such as Glass–Steagall or what ever your having your self is now necessary and are the only way to gain trust in the faith based money system we have.
      If people don’t trust the faith money system then it cannot function as is happening…

      • breltub

        There are many instance of governments bailing out banks and other failed businesses before 2008, so I do not see your point there.

        I also never said anything about enshrining anything in law, so you have jumped to some strange conclusion there based on what I said. Perhaps you can clarify your statement.

        I am also open to changing from a faith based money system so I am not in agreement with you when you advocate a glass-stegall type situation if it is just a sweeping it under the rug exercise.
        Which to me anyway, appears to be what Glass-Steagall is.

        I have ranted on in the past about what I think might be a good approach on this forum. I will try and dig it out.

        • joe hack

          “There are many instance of governments bailing out banks and other failed businesses before 2008, so I do not see your point there.” – “no guarantee or tax money used to prop up a banking system”

          You argued for no regulation which means they can do what they like whenever they like they have done with the bailout.

          I never said you said anything about enshrining anything into law but arguing that there should be no regulation is arguing for regulation there for it would have to be a regulation enshrined into law to work – regulation.

          I we would agree on faith money but pragmatically regulation is more likely to be achieved- making a start…

          • breltub

            Ok, as this has gone way off topic I’ll try get it quickly back to regulation.

            In my opinion if there is no regulation people will not be fooled into believing it is safe and they will be more responsible with how they invest and save their cash.

            It is more of a thought exercise than anything.

            But the general thrust of the argument is that people are fooled by regulation and it is just an advertising gimmick. So remove it and let everyone realise that they could be dealing with a shyster!

            In a way, with the power to comment and communicate on the internet, people can review and comment easily on their dealings with individuals and a reputation can be built up almost in an open source way rather than in a “regulated” way.

            Regulation is there to protect people, supposedly, so then let the regulation be done by the people. Forget your authorities.

          • joe hack

            To have no regulation you need to regulate, that is, you have to have a regulation that states there is no regulation otherwise a future government can impose what it likes.

            No regulation means a free for all and no one would have any faith in that.

            Would you deal with a bank that could do what it likes perceived or others wise?

            Banking is not just about cash there is only 3% cash worldwide. would you deal with an unregulated Drum managed bank, look what they Drum did with the banks with regulation in place,.

          • breltub

            To have no regulation, you need to regulate government. Yes, I’m in favor of putting limits on that.

            No regulation does not mean a free for all, what it would really mean is that a huge amount of people would go and seek out the truth about the institutions where they put their money.

            There would be an emphasis on do it yourself.

            Appointing a regulator in my opinion is outsourcing your job of looking after yourself.

          • Rule of law is lacking and needs to be active.
            Less regulations the better. Bureaucrats love the regs. Europe is stifled with regulations.

      • breltub

        Damn, cannot find it. I’ll see if I have it on my home laptop.

        David, or Adam.
        Is there any search utility for past comments?
        Just wondering as google worked well in the past, but since the new design, not so much.

        As simply providing a link to previous rants could stop a lot of the “repeat ad nauseum” that tends to happen with some posters.

      • There is no faith in the system because it is a poor system. That is why the government placed guarantees of security of money on deposit to insure the depositor from bad business practice.

        Change to a system that is trustworthy and the government insurance is unnecessary.

        Allowing banks to fail from poor practice may induce banks to provide a better more trustworthy system.

        • joe hack

          “Allowing banks to fail from poor practice may induce banks to provide a better more trustworthy system.”

          Yes, but to do that and to prevent another government from imposing a bailout you need to regulate and to enshrine it to law – enshrined in the constitution that way the people can decide and a debate will be had.

          Much better than a midnight discion made by an under pressure minister and yes EU could do nothing about it

          • you need to elect a government
            A to deregulate
            B to refrain in the future from regulation.

            Some hope unless you vote for such a government.

            Now is the time to support Direct Democracy Ireland and get a government that does what it is told. Where the people regain the power. Where the government is by the people and for the people rather than government of the people.
            Have you visited their web site or read their literature?

          • joe hack

            “you need to elect a government”

            YOU- there in lies the problem

            While you are doing that I go and promise free beer if elected.

            General Speaking – most people leave in their own bubbles and of the 60% of people that vote less than 10%truly know who and what they are voting for – Whats in it for me – direct democracy would be a disaster – pot holes might get fixed, long term planing would be farcical.

            If you wish to see the result of no regulation look back into history – try the dark ages or maybe even Somalia…or… Libya today…

            It is extremely naive to suggest a society does not need regulations, human nature was just demonstrated in the Anglo tapes. These people are not freaks of human nature they are the norm… to long in the environment that they worked in…

          • Colin

            Ask Adam about Somalia, he has got the solution on that one.

        • breltub

          Yip, I agree with you Tony.
          I have half looked at their website, I’ll probably do it more when elections start coming around.

          I’ve looked a bit more into the German/Nordic pirate party movement.

          I wouldn’t be for democracy for all. There are a lot of things that are nobody else’s business, whether or not a load of people vote on it or not.

          A lot of those democracy things like to trample on individual liberty in the name of their vision of what is good for all.

          I’ll check out that site more anyway.
          Later,
          Brian

    • DB4545

      A question. Mr. Conrad Gallagher was extradited with relative ease from the USA a few years ago in relation to some difficulty about paintings in a restaurant valued at approx 30,000 euro. He was later cleared of any wrongdoing in relation to the matter. It could be argued that Mr. Drumm & Co. may have obtained goods or services by deception from the Irish State and/or the German State to the tune of 7billion euro. If the Irish Government won’t initiate a warrant to arrest these people because of the tales they may tell about people in high places in Ireland is it possible for the Germans to do it so they can get some answers about the possible 7 billion euro fraud perpetrated on their banks? I hope Frau Merkel has more balls than our bunch of goo breens.

      • DB4545

        Sorry that last word should read gombeens.

      • Colin

        Good point. Personally I think the Guards can’t be arsed. They don’t have any work ethic at all. They only want to catch you speeding or parking illegally. They love attending sports/music/street events where they just direct people and traffic. Maybe they’ve given up as the judiciary are absolutely hopeless, handing out lenient sentences.

        There is no justice in Ireland, crime pays.

    • Very interesting write up re WIR Thanks for that

  4. Grey Fox

    “The guarantee was temporary to stop the flood of money leaving the country in panic.”
    Problem is, government had no right to stop the flood of money out of the Country, neither did the Banks IT WAS NOT THEIR MONEY!!

  5. Is this article about justifying your role in promoting the bank guarantee? As the tapes reveal the idea was a hotel California situation, check in and they cant check out. As I have said before, they knew how bad it was and you knew how bad it was. You gave the Minister a banker favoured solution.

    There was other options, you didn’t present them. I have being following you closely for years. You are a banker dressed up in the peoples champ wool.

    As usual there will be a few “David is the best comment posted below.” BA BA BA

  6. Eireannach

    @IrishSovereignty

    DMcW is not below turning the Anglo-Irish cassettes ‘crisis’ into an opportunity to defend his decision to advise Lenihan to go for a bank guarantee.

    He is defending his own reputation in this article.

    Sadly for DMcW, John Bowe’s response to Lenihan’s move is to sing Deutschland Über Alles.

    For a laugh, you understand, because he found DMcW and Lenihan’s move naive and worth having a laugh at.

  7. joe hack

    !It is baffling that nobody linked the much talked-about imminence of a property crash to the solvency of the banks. For instance, David McWilliams, the economic commentator, who for years had been prophesying the collapse of what he regarded as the “property bubble”, was the one urging the government and the minister for finance Brian Lenihan personally to give a blanket bank guarantee. David McWilliams must not have believed himself!” (Vincent Browne Irish Times Wed, Jun 26, 2013, 12:00)

    http://www.irishtimes.com/business/economy/ireland/why-did-almost-no-one-realise-that-anglo-irish-was-not-just-illiquid-but-insolvent-1.1442412

  8. 5Fingers

    The reason for the sacrificing of Ireland and continuing to do so is very very simple. Given the choice between money and integrity, money wins every f*&^ing time.

    Drumm and the rest of them across all the banking community are evil at best. The boom we witnessed is like a zombie movie where the disease spreads by “Status Anxiety”. People are panting to ape these characters. Our politicans, regulators and our civil servants and you name it.

    The real reason we have massive muzzling laws relating to defamation and the reason no one goes to jail is precisely due to the fact that all of this was well known about and copper-fastened to ensure the guys spoils never have to cough up.

    Hostage crisis my ar$e!. More like a massive cover up and mind our friends at all costs! Call it like it was David.

    Make no mistake, people have lost their lives because of this. Entire communities have been wrecked because of this. Any attempt to present this as a form of mus-judgement or imprudence on the part of those involved is like calling drug pushing gangsterism as a form of badly run pharmacy.

    • Eireannach

      +1

      DMcW actually seems to want his readers to naively believe that ‘mistakes were made’ RE: the bank guarantee.

      DMcW wanted his South Side fratboy buddies to use the guarantee to ‘get the f**king money in’.

      That was the DMcW’s advise to Lenihan – Ireland’s banks need deposits, so declare a bank guarantee and that will ‘get the f**king money in’.

      DMcW advise to Lenihan was basically a sneak attack on the UK govt., German govt. and other EU govts be trying to suck money from their banks into Irish banks, under the cover of the guarantee.

      That ‘master stroke’ turned out to backfire big time, as the Germans et al had a chance to digest the sheer brazen cheek of the Irish bank guarantee.

      In the event to bank guarantee didn’t work – it was a bad karma idea.

      • SMOKEY

        Actually you are totally wrong,D-Mac had always envisioned a temporary guarantee, limited in time and never a blanket guarantee.
        You must be new to this blog or unaware of his past writings, before the Sept guarantee. Anyway, now you are up to speed.

        • Eireannach

          You must be inexperienced in business if you think a temporary guarantee would ever remain a temporary guarantee.

          I also reckon you’re inexperienced in business and probably under 30 because you’re yet another DMcW lick-arse. He’s your pop economist idol and you won’t hear a bad word said about him.

          He advised Lenihan to guarantee the banks and he did so knowing full well that the Irish banks would use the guarantee to try to suck in deposits from other banks in other countries.

          DMcW’s position was bad karma.

          • SMOKEY

            Tough guy hiding behind a coumputer screen. When you were bullied in school did it make you cry?
            Did you go to bed at night and think about your sister? Fuck you asshole.
            And if you want to settle like a man.
            I will tell you where we can meet.
            Dont talk to me that way or you will be eating your dinner through a straw punk.Eat shit and die.

  9. michaelcoughlan

    Afternoon David,

    “Why this didn’t happen in the subsequent months/years remains a mystery”

    Odd remark considering you have been pointing out all along that what’s going on is an exercise in saving the euro.

    Mrs Edna isn’t going to put us first.

    Thankfully a commentator of substance also correctly identifies that many of the humans in charge of organisations of this type are sociopathetic.

    I never though I would find myself referring to bonbon but it’s bail in’s we should be afraid off.

    • michaelcoughlan

      Hi,

      I forgot to point out that David Drumm was hired by a company in the US on a massive salary and his employers know full well the things he was up to in anglo.

      This fact only sounds odd to someone who isn’t a sociopath. To a sociopath Davids’s behaviour is a virtue.

  10. cooldude

    This is a very interesting and given the Anglo debacle timely article. One thing that strikes me is what David describes as the “notion” that depositors are merely lenders to a bank and in the event of bank insolvency they become unsecured creditors of the bank and are close to last in line to be paid out. Unfortunately this is much more than a “notion” and is exactly the legal position between a depositor and a bank. When you deposit money in a bank you are actually lending money to the bank which has the legal right to do whatever it wants with these funds. The mistake most people make, including me until recently, is to assume that the bank is somehow a trustee and that the legal ownership of the money is still theirs. The fact is the ownership of the money is transferred to the bank and the depositor’s legal status is a CREDITOR to the bank. This is the dirty little secret of fractional reserve banking which very few people are aware of because the banks and their puppet politicians keep this FACT hidden from the public. This legal status has been in position for hundreds of years and was established in England (where else) by the House of Lords in 1848 in the case of Foley v Hill. Here is a quick quote from the judgement
    “Money when paid into a bank ceases altogether to be the money of the principal…it is then the money of the banker.”

    There you have it loud and clear this is much more than some “notion” it is the law and it is the dirty little secret of fractional reserve banking which the “elites” have up till now pretended didn’t exist. It does exist and will be used from now on in the case of a bank insolvency. Your “nest egg” is simply fodder for the criminal bankers to take whenever their reckless behavior gets them into even more trouble.

    What all this clearly shows is just how rotten our system of fractional reserve banking propped up and encouraged into reckless lending by our system of privately owned central banks. This whole system is one of fraud and if you trust them with your money good luck.

  11. I think it’s gas how nobody wants to read what david McWilliams actually said and advocated in 2008, particularly at the point where the game was up in September of that year.
    I found those archived articles on this site relatively easily and they set out clearly where the man stood as regards what should be done.
    In the event, things were half done for political expediency I’ve no doubt and broke every rule of capitalism.
    Why persist with the ad hominem attacks on the guy?
    If those who take the cheap swipes were here at the time, or made the effort to read what was said, life might get a little happier and less nasty.
    Try to keep the diatribe out of the discussions please.

    • Eireannach

      Diatribe?

      What was the point of the bank guarantee?

      Save deposits? A less naive explanation is – such money out of banks in other juristictions, so we can save Ireland’s banks without doing anything other than undermining the banking systems of other juristictions.

      This is why Lenihan called the bank guarantee ‘the cheapest bailout in the world’.

      NOTE: Lenihan’s remarks DO NOT REFER TO DEPOSITOR SECURITY IN ANY WAY!! They refer to incoming deposits, pinched from other banks under the umbrella of the guarantee.

      • Eireannach

        …’suck’ money out of banks…

      • Colin

        Lenihan hadn’t a clue what he was talking about. Actions speak louder than words. ‘We’ve turned the corner’ – Budget December 10 2009.

        http://www.youtube.com/watch?v=Y2EFkBIoHtk

        • Adam Byrne

          He was a total spoofer, making it up as he went along, just like all the rest of the corrupt incompetents that comprise the political ‘elite’ in this country, the same ‘elite’ that the ignorant lumpen proletariat keep on electing.

          Welcome to Ireland – the only place on Earth where turkeys do actually vote for Christmas.

    • 5Fingers

      Look, the idea that “kidnapping” was a consequence of a meltdown rather than a cause is rather like saying criminality is a consequence of the pressure you are under and all was just a man sized tantrum.

      “ad hominem” is the name of the game when you open a “free for all blog”. As for the attacks – irrespective of the misunderstandings around timing or scope of the guarantee or who said what – I find our host has a tendency to overlook the depth of the criminality involved by dressing it up with a rationale.

      Maybe it is time to be nasty. Diatribe is just another device for expression – we get over it. Let’s hope it stays at that level and the law and our government starts to do the right thing rather than looking out for themselves.

    • Adam Byrne

      David’s precise advice is clearly on the record. They did not take that advice, had they, things might have been different.

      • 5Fingers

        Was it not a recollection? Not on record at all. In any event, there will always be interpretations on the scope and timing of advice. Live with it!

        David’s best work for me was on “Outsiders pay for insider greed” (14th march 2010) -I urge people to scan it – I must say, I never proper understood the breadth of what we are up against until this week . Here the real problem is laid bare. What is surprising is that this theme is not maintained to the same strength in this article. It seems to take an apologist view and I am assuming this was written AFTER the tapes were released.

      • Colin

        They did not even pay for this advice. And then they bastardised the advice into a frankensteinesque calamity.

    • Colin

      Furrylugs,

      No one is so blind as those who do not wish to see.

      There is no hope for those who can’t see the difference between what David advocated when asked at his own kitchen table by Lenny and what was subsequently made policy by Lenny & Co.

      • Except what happened in between?

        • Colin

          David suggested a temporary guarantee of 12 months, to buy time to get a handle on the scale of the problem, then burn the bondholders.

          The government, including the current one, keeps renewing the guarantee every 12 months, and in the process pays out billions to the bondholders.

  12. joe hack

    “Ireland’s economy lurches back into recession” – when hearing this CAO statement today one takes it as if it’s water off a ducks back (oh gosh really). It seems times and expectations have changed but this might be a good thing too?

    |||

    <> (DMcW) Yes, we had a bank run but not by depositors but by bondholders the crash was not brought about by governments but by the privatisation of our money system and nothing has changed. It’s Time to change that and it looks like you may be on board…
    Ireland is too small to change or to have effect on the globalisation of privatised money system.

    We need our own money system and our sovereignty this is essential if we are not to become the Donegal of Europe. The EU is too big a ship to turn fast in the many small harbours it occupies the banking union will be a long time coming this with other necessary changes will take a long time. Meanwhile the bailout buckets will get smaller and the ship may sink we need our own lifeboat. We are now been sucked in to a trade agreement (EU/USA?) (G8 we have no say democracy USA style) that will diminish Irelands relations with the USA/EU States hegemony Ireland will be a beggar, a New Orleans of EU/USA.

    In our out of the Euro the banking union or other such regulation such as Glass–Steagall or whatever your having your self is now necessary and is the only way to gain trust in the faith based money system we have.

    If people don’t trust the faith based money system then it cannot function and will come to a stop as is happening…

    Nice to see of DMcW putting forward some a little bit of a solution hope to see more…

  13. After only 20 comments our friend is on the ropes and taking a murderous beating. The natives want blood. They want ‘Drummer’ and the other scum hanging from lamp posts

      • These guys destroyed the country and their actions were premeditated. They should be in jail and remain there for a very long time. In fact if it was up to me they would being doing the equivalent of HMP and it would be 30 years before they could even THINK about parole

  14. Adelaide

    Hi David
    Gangster banksers, rotten politicians, exploitative insiders etc……
    CHICKEN AND EGG QUESTION.
    Do corrupt participants ultimately produce a corrupt system?
    OR
    Does a corrupt system ultimately produce corrupt participants?
    WHICH IS IT?

    Are we remonstrating with The SYSTEM or are we remonstrating with HUMAN NATURE? If it’s human nature then we are wasting our breath, every and any system will be corrupted and fail. On the other hand if it is the System at fault then there is hope for improvement and our remonstrations are not futile. I have yet to answer the above question clearly in my mind. What do you think?

    • joe hack

      Wishful hoping aside, I am constantly debating this with myself and tend to conclude ‘our remonstrations are not futile’ but sometimes they inform the corrupt to better plan.

      Snowden is a case where they have tried to shoot the messenger and point the finger at Russia,China … to distract from the real issue which is not been debated by the jingoistic media or insidious politicians who are in defence mode – ‘me thinks thou does protest to much’.
      Oppression will undo the oppressor it always has and has led to revolution.
      Remonstrations let people know they are been oppressed. (Sometime the oppressors realise in time and do enough to keep people in their life bubble and a real change take longer but sometimes the straw is as little as 7cent (Brazil).

      Can we ‘PLEASE’ have more Dissention? Asking for approval to descent is surly pointless.

      Be Bold

    • Adam Byrne

      Good question Adelaide, I DO think human behaviour can be improved by introducing adequate systems to dissuade it’s worst characteristic – if it couldn’t we’d still be in the Dark Ages.

      • 5Fingers

        Unfortunately human behavior is value driven and that is ultimately modified by money when we let it. And boy do we let it!

        A system is just a system. All systems can be gamed. If those that police it can be paid off, we have bother.

        The move from the dark ages is only down to sacrifice – not systems. It is down to the power in each of us to remain determined. Leadership.

      • Pauldiv

        It’s amazing that we can fly men to the moon and create systems to hoover up every form of communications on the planet yet man can’t behave and run a decent economy.

    • The corrupt system is designed as such to fail deliberately.

      nobody looks far enough back to see the cause of our problem.
      The money system designed for them by the bankster families backed by nothing.

      Following:
      Then a world based single currency
      Then a digitized currency.
      All will require a card to shop, buy or spend or save.
      Then the infamous embedded electronic number assigned at birth.
      Then you are totally controlled.

      Order out of chaos. The solutions proposed will erode further freedoms.

      • 5Fingers

        You are evangelizing a system to fix all ills. This was not a systems failure. This was down to evil doing from day 1.

        Look, it is not a case that the tools were rubbish – the tradesman was plain incompetent. Agreed, a better tool makes the job easier. But all systems can be gamed by those who wish it.

        Fix the people and the rest will follow. Am getting fed up with prescriptions on new systems, new gadgets, new diets – what’s wrong with telling people they did wrong and they have to pay. The whole idea was to con people, cause them to make bad decisions and rush people into catastrophic arrangements.

  15. Adelaide

    Hi Adam, that would also be my outlook. A system can nurture either the good or bad in people. I’m convinced the power of conditioning is absolute on people who are inherently malleable and start out life as blank slates. In the correct environment people will flourish and vice versa. The only downside with this view is that you have to constantly tell yourself that the gombeen destructive behaviour of all and sundry is a form of conditioning or even brainwashing by negative group think imposed by a bad system which I feel uncomfortable with as I find it slightly patronising and elitist. Better that I suppose than a sense of hopelessness.

    • 5Fingers

      Actually there is actually a maths proof to say such systems are impossible. The mind is beyond a “system” because it derived that proof.

      Also, rather than use blank slates, a better analogy is William Blake’s a garden fully planted and ready to grow. These are the talents. How these occur is not important. What is important is the nourishment of same.

      Educate people to be critical and discerning and the rest will follow. Help them loose their fear of peer pressure and truth will prevail and money will have no power. It’ll be a tool.

      We will always disagree, we will always love and hate and hold opinion. But that does not mean you have to resort to criminality or excuse it.

      • bonbon

        Right on Gödel, who proved the mind is beyond any kind og machine, a negative proof. So creativity, that essence of mind, never mentioned or nurtured, never mind even hinted at, is the most important element of economics at least.

        You cannot touch, smell, molly coddle the mind, but proof of its existence is easy- why no animal ever could or did use fire? Is’nt it interesting how the greenies want us to use wind solar, and no fire? greenie economics is even worse than flatulent finance bubbles – it leads to animal population densites, in other words to genocide.

  16. The Anglo Tapes are a national embarrassment yet John Bruton thinks we need to regulate these guys even less. He is insane

    • bonbon

      He sounds Austian, another word for the mental illness.

      • bonbon

        Austrian Schooler’s are all over the place now in Gov’t, the IMF, BIS, EZB, FED. It is a pandemic!

        • cooldude

          You sound like you are mentally ill. Get off your high horse and engage in real debate. That doesn’t mean repeating everything you have read in your latest La Rouche leaflet it means actually engaging your brain to produce a constructive comment. I feel another Glass Seagull coming on.

          • bonbon

            Relax, schooler. Your crowd are in power, causing such a disaster! Hayek is not marginalist anymore! So why the hand-wringing? You are in with the Big Boys, the 3 one-eyed Troika.

          • Trying to blame the Austrians for this bust is rubbish.you lie to decive. policies carried out for this mess are
            LaRouche keynesianism

  17. bonbon

    What a jig and a reel around the Glass-Steagall swords! Have’nt ye forgotten that that was meant for celebrating victory?

    The fight has just only begun! Jigs and reels later!

    The Anglo bankster tapes are exactly what is needed on the doc of the upcoming Pecora Commission. Perfect material, unbeatable, at least so far.

    Now be serious, Glass-Steagall first, let the banksters change their “nature” in rubber rooms, howl all they like. It’ll be recorded any by Tempora/PRISM.

  18. bonbon

    “US Must Call in the Unpayable Debts of London and Continental European Banks”

    Brace yourself DMcW, this is what will happen. I think you have underestimated the situation entirely. West Brit parochialism has limited the vision, I’ll say.

    It is time to understand what Glass-Steagall really means!

  19. bonbon

    Thomas Hoenig & Sheila Bair Recommend Glass-Steagall To Congress; British MP Tells Chancellor “Glass-Steagall Or Crash”

    Have you all really made an effort to understand this? I recommend it urgently, as you will be simply upstaged by events, AGAIN.

  20. redriversix

    Yes

    No

    about 6.30

    load of crap

    disagree entirely

    Good Evening Mr Brogan,Adam,Pauldiv..hope everything wonderful..?

    oh pizza ready………….

    • Pauldiv

      Good Evening RR6. All is well in this house of joy today.

    • RR6, Greyfox, Philip, Lorraine, Adam and gang

      I have two more days here and I am off to old blighty and thence back to Canada.
      Anyone interested in a get together somewhere in North dub area (Open for suggestion) Friday night or Saturday afternoon.
      Let me know and I will be there.

      I leave on the early am Sunday ferry.

      Cheers

      Tony

  21. Harper66

    To put things in context –

    Brendan Keenan of the Irish Independent tells Kelly he is wrong about the scale of the problem with Irish banking.2008.

    http://www.youtube.com/watch?v=EI5o8qsTVoM

    David Mc Williams predicts Ireland’s economic downturn in 2003, Austin Hughes disagrees

    http://www.youtube.com/watch?v=6gWPmufcOTo

    The hacks are out tonight, lots of abuse for David. I would be more concerned if I were getting compliments. You know what floats to the top in these parts……

  22. Harper66

    Our government has been trying to get the message out to that Ireland is open for business.Ireland is a safe place to do business.

    Our governments reaction to the Anlgo tapes will have shattered this illusion.

    Our Taoiseach tells us he understands the anger of the people. Has he no anger? Instead Kenny decides to use the tapes as a political football and have a few swipes at FF. I heard it reported that the FG machine intends to push for an Oireachtas inquiry believing that timed correctly maximum damage could be done to FF before the next election.

    When asked if there are anymore more tapes from the other bailed out banks Kenny tells us he dunno….
    http://www.thejournal.ie/banks-kenny-leaders-questions-967099-Jun2013/

    Our minister for finance tells us he was unaware the tapes even existed –
    http://www.theaustralian.com.au/news/breaking-news/irish-bankers-taped-joking-about-bailout/story-fn3dxix6-1226669892821

    The contents of the tapes are shocking. The world is looking at the reaction of our current government and it is seeing in Ireland it is business as usual…….

  23. Ryu Hayabusa

    Aye shipmates!

    The storm clouds are gathering and the horizon is taking on a distinctly darkened hue…

  24. Tull McAdoo

    The veneer of respectability is well and truly scattered all over Stephens Green, headquarters of the infamous Anglo, in light of these most recent phone recordings.

    Indeed the veneer has been stripped from the whole sordid bunch of cowboys from Kildare Street, through the financial regulator, central bank, ntma and especially the centre of all the bloody incompetence and for me the breeding ground of all that is wrong with Ireland, the one and only Department of Finance.

    It comes as no surprise to me to read that most of these clowns started out in the DOF, before moving on to the central bank etc. and finally finishing up of various boards all over the place.

    I mean for Christ sake did nobody on the board at the TSB think that it might be worth asking fellow board member Liam Reilly for his opinion as to the validity of “overnighting” billions of Euro on Anglo’s books in order to mislead shareholders, markets etc, given the fact that he was a former Financial Regulator appointed by none other than Charlie “when I have I’ll spend it “ McCreevey…….

    The guys here in the office cannot believe the language, attitude, immaturity etc. of the people running Irish Banks and are joking about the type of questions that they were asked when being interviewed for their respective positions….

    Ireland should have a second gathering later in the year out in Dublin Bay where the arrogance of some of these clowns could be tested Canute like (Canute’s name is known nowadays largely because of the story that he was so proud that he thought his command could hold back the tide) and if not then we shall see if the rising tide does indeed lift all boats……

    Here’s a guy with real soul…Chris Botti…..Funny valentine…..Goodnight Ireland sleep well and take it away Chrisopher…..

    http://www.youtube.com/watch?v=M51UqyWpYko

    • joe sod

      spot on, thats why these tapes were have sat there for four years, thats why there has been no banking enquiry, because it would shine a light into how this country is administered. The secrecy at the top of the civil service and the department of finance. We need to see the details of the regulation of the banks, who carried it out, what did they see or not see, all the correspondence between the regulatory officials and the banks. The veil of secrecy must be lifted and done by international experts not irish politicians or lawyers. How did john hurley get to be governor of the central bank, how did patrick neary get to be regulator, they didn’t even have the basic qualifications for the job. Whatever you say about david drum etc at least they understood the gravity of the situation the bank faced, it was the dodgy bankers that finally woke up the regulator not the other way around, and the regulator struggled to take in the reality of the situation, that speaks volumes. Its not just regulation of the banks that was at fault. Building regulations not being enforced by the councils, planning regulations openly flouted. the country is not in a mess because of dodgy banks but fundamentally by dodgy administration and regulation

      • Eireannach

        +101

        We need the civil service tapes.

        They would be the really, REALLY shocking tapes.

        • Colin

          They’d be cute out you see, they’d converse as gaeilge, that’s why there is the language requirement, and that’s why Irish is the Official Language of the country, even though you’d look at someone with two heads if a stranger walked up to you and started cupla focal with you.

          But with your moniker, I guess you’ll know what they sleveens are saying anyway, maith an fear Eireannach. An bhfuil cead agam dul go dti an leithreas mas e do thoil e because this country makes me feel sick?

    • Pauldiv

      This is very damaging to Ireland’s reputation.

    • Harper66

      “Fuchs, as reported by Bloomberg, said that he didn’t believe that Europe’s permanent bailout fund – the European Stability Mechanism (ESM) will be able to retrospectively provide funds to bailed-out surviving Irish banks.

      “As far as retrospective is concerned this is not going to be possible because the ESM can only go forward and not back. I have the feeling it is only for future problems but not for those prior to 2012″

      Game set and match. Now watch the shysters in the Dail push the blame onto each other. A celebration of incompetence and self interest.

  25. It is blatantly obvious that few understand the cause of the present catastrophic depression (call it by its proper name).

    finally DMW identifies that the depression is the result of the boom. Why we had a boom and what to do about it is apparently a mystery.

    what caused it?
    Why did the central banks not prevent it?
    Why were the regulators asleep?

    how many times has it to be repeated.
    A CREDIT INDUCED BOOM LEADS TO AN INEVITABLE BUST. (Austrian school economics 101)
    Always has happened and seems like it always will.

    So now the question is why was there a boom in the first place and was it credit induced and if so why.

    It is axiomatic that an expansion of the money supply is inflation ( Austrian School Economics 101)Affirmed by Milton Freedman “Inflation is always a monetary matter” or words to that effect.

    So did the money supply increase. If so how?
    Any graph of the money supply shows an exponential growth since 1971 when Nixon went off the gold convertible standard. All countries since then have been on a competitive devaluation course since then.

    Well it seems our governments, being unwilling to tax too heavily ran deficits and then borrowed to add to the national debt AAt first borrowing from their own citizens. (money not increased but recycled) Later borrowing from the banks and then the central banks. That is bonds were bought by commercial banks and then by central banks. Other countries bought bonds too and they in turn conjured their own money from thin air to do so.(Japan and China in particular)

    The banks simply created money from thin air to buy the bonds. In the first place the commercial banks do it using fractional reserve principles and central banks do it directly by adding the bonds to their balance sheets.

    All this money circulates and so comes into the hands of the corporations and the people. With the money supply inflated at a rate far higher than economic growth the buying power of each unit of currency was reduced and so it appeared that prices were rising.

    But there was no economic growth to support this expansion of money and so there is the bubble. As people are loaded with debt , interest payments rise and spending on real goods is curtailed and the economy starts to slow. The interest still has to be paid and as the economy slows it becomes a larger part of the economy until it snuffs out economic activity altogether and the boom collapses.

    In days past there has been a revival stimulated by adding more money to the economy (Mr Keynes fallacy)resulting in a recovery of sorts but the addition of debt is stifling and so the only way to get stimulus is to reduce interest by lowering the rate. Works if you start at 10% and drop to 8% But today at !5 there is nowhere to go except negative rates.

    We are at debt suffocation. There is no escape until the debt is paid, revoked (Bankruptcy)or balanced by assets.

    How it happened does not tell us why it happened.

    It seems the world bankster elites wish to have the booms and busts.
    Firstly they mortgage the assets and then foreclose and take them for nothing (the money loaned originally cost nothing)

    Secondly they cause social upheaval deliberately. As I said, Out of chaos comes order. The people plead for a solution.

    The bankers , as well as stripping the people are funding the politicians. They also threaten the politicians with financial Armageddon if certain thing are not done. Consequently politicians accede to the demands of the bankers.

    So we are where we are today because of the deliberate policies of the banker families.

    Tonight I attended a presentation by Bill Still in Bray. only 40 people were there. This just 2 days after I was kindly reminded by dwalsh about Bill Still’s The Wizard of OZ and Dorothy’s journey along the yellow brick road.

    There were many points made in his presentation and I should say I agreed 95% with his position.
    He finished by saying over and over that we have to do the following to free ourselves.

    Ireland must leave the ECU and the EURO
    To regain sovereignty Ireland must have its own currency.
    The volume of money must be strictly controlled.
    money should be issued by treasury(the financial arm of government)debt free.
    He also said that gold and silver have a place as auxiliary to help keep the government issued money honest. This could be coin or notes backed by precious metal.

    In addition I would suggest the legal tender laws be repealed and that all people have a free choice as to which money they wish to use for daily trade and savings.

    So there you have it. Our problems stem from the issuance of debt based money with interest as issued by the central banks and the fractional reserve bankers of the commercial banks.
    Both need to be banned. Close the central banks. Ban fractional reserve lending.

    Booms will be removed and the associated busts.

    Ireland has an educated work force , plenty of natural assets and a small population so is the ideal leader for monetary reform. Wealth to all people . Lets do it. Vote for political reform. Power returned to the people.

    • Adelaide

      Hi Tony. Bill Still in Bray! Where was this advertised? I kick myself I missed it.

    • bonbon

      The “hard money” maniacs are out to cause genocide, the worst attack on the physical economy that provides our very ability to live, ever seen. Exactly the hard money maniacs of the BCS, BIS, and JPMC.

      Do you not realize you are parroting those thugs? The Austrian recipe you again laid out is exactly what the 3 insane groups just published. All 3 reports are posted here.

      This is why the utter, complete confusion, and dangerous lurching of economists making fools of themselves in public is a parade to wonder at.

  26. Good for it to be exposed. It is not restricted to Ireland. I can assure you such attitudes are endemic. It should be taken as a warning by all countries, they are not immune.

  27. Above was supposed to be Re Pauldiv’s comment on Irelands reputation.

  28. pauloriain

    David, why protect depositors at the expense of taxpayers and ordinary citizens of a country, who may have no money on deposit. I am sorry, but you are completely wrong on this one and the only conclusion I can come to on this, is you must have a lot of money on deposit.

    The bailin in Cyprus was a choice between, loose a smallish percentage of your money or loose it all… I think that’s a pretty good deal actually.

    Here is what should happen with banks; Auditors need to properly audit banks and report the situation and outline the risks. If they don’t and they didn’t then they are liable, they have insurance… their insurance pays. And, if depositors were given the proper information from the auditors about the increasing risks, they would be able to move their money out of the bank sooner as the bank begins to go rogue and stop the banks lending. Ultimately the depositors money has to go somewhere, so it will still be in the system somewhere to be lent and create wealth.

    Secondly, regulators should have twigged that the loan books were out of sync and too risky. In our case, putting a patsy sheep in as regulator rather that a cast tiger is what went wrong. Also David, for example, if I am not mistaken, this is the 3rd time AIB has been bailed out and they have also been caught up in tax evasion……. they are licensed by the state. A license is a conditional permit and can be taken away…… AIB, as a proven culturally diseased bank, should have (had) either, its license taken away a long time ago or conditions put on its license, so it could not get into this position.

    Ultimately though, Joe ordinary citizen and taxpayer (most people have no money saved on deposit and live day to day) should not be giving money to people who have money, just because they have money…. life’s a chance and life’s a bitch, sometimes!

    Truth be told, now we have a situation, where there’s no risk…. the tax payer will always pick up the tab.

    And let’s think about this for a moment….. when the dust settles on this in the coming years… we are still going to have AIB & Bank of Ireland and Permanent TSB etc on our high streets as if nothing happened. We’ll have to walk down the street, past scumbag institutions, because that’s what they are. These corporate entities, in the eyes of the law are given the status of persons, so why, like a person, aren’t they subject to detention, why don’t thy lose their liberty, why don’t they go to prison……. e.g. when someone goes to prison they lose the ability to make money, effectively the person goes out of business. But someone somewhere else takes up the slack and does the work that person would do and makes a gain.

    • Harper66

      Excellent post Paul. Nail on the head.

    • 5Fingers

      +++1 We have all the systems we need. Let’s use them and punish abuse and incompetence.

      • cooldude

        Banking is basically just another service to be provided. What has gone wrong is now the banks have central banks and puppet politicians to fall back on when their reckless bets go wrong. Simply treat banking like any other industry and let failed institutions fail and allow ease of entry for new competitors to take their place. We also need choices in how our money is kept for us and I think there would be a lot of demand for full reserve banks at the moment who don’t gamble with their clients money. Let failure fail and give people choice.

    • Colin

      Should there be any cap or % of deposits protected? Will the children lose their Communion money? Will students working in summer months to pay for university fees get wiped out, and have no classes to attend? Will those saving to buy a car get wiped out?

      So everyone keeps their money in their sock drawer or under the mattress, who wins? The burglars do, rich pickings! End result, total breakdown in law and order.

  29. pauloriain

    David, many of us have studied economics and here’s one fact I know about, we have thousands and thousands of economists and yet here we are up the creek without a paddle…. if you understand nature, then you understand that what is going on is nature, human nature if you like. If you couple economics, which gives very limited view of what is going on, with nature then you start to get a little closer to being able to manage the economy and society.

    What is lacking at this stage is an ability to be creative, to envision the future and what we need to do economically to move to a different economic model… the new globalized world has turned our economic, wealth creating model. We are going to have to cut costs and that starts with re pricing unproductive assets like property…

    • 5Fingers

      When the mechanism to express pricing is 100% controlled and regulated by 3rd parties who are beyond the law and who can do what they like to a nation, then any new economic model will be inherently gamed to suit their purposes.

      I have to say, the more I have read about economics, the more it seems to be a soft science without any inherent rules or principles. Unlike a real science, it lacks experimental repeatability or consistency and that explains the poor forecasts. Good economists are good in another hard science or a study of the mind/ society. Those that think it is about regulated money manipulation to tweak markets are basically innumerate – which is really what monetarism is.

      Still, stealing is stealing. Misrepresentation by licensed auditors is lying. Just on the latter alone, all mortgage deals taken out should be nullified and let the those who rigged the system (auditors, bankers, lawyers etc) cough up – I am sure they have sufficient indemnity insurance.

      • Adelaide

        In the future Economics will have been rightly resigned to dust bin resting on top of Alchemy and Astrology.

        • bonbon

          Unfortunately alchemy still masquerades as economics, Austrian School, while animal behavior is touted by Keynesian “spirits”.

          So how about science-driven economics at long last? Such things as universal principles of economy? Why the difference between us and mere lower animals, creativity, is what economics is all about?

          The Hamlet fear of this “unknown kingdom”, from where none return,
          could send you right back grasping for the Alchemists gold
          if you succumb!

  30. Dorothy Jones

    http://www.forbes.com/sites/karlwhelan/2013/06/28/the-anglo-tapes-the-guarantee-and-irelands-economic-crisis/
    The Anglo Tapes, The Guarantee And Ireland’s Economic Crisis in Forbes 130628 by Karl Whelan.
    Brian Lucey on Anglo Tapes Pravda RTE tom 130629 Sat 1-2pm with Clare Byrne

  31. Mr Happy Dole Dude

    It’ going to happen even if we don’t say it…

    But sadly honesty and whistle blowing have destroyed many a person and people don’t want the truth as it hurts….

    Be careful out there Mac it’ jungle

  32. Mr Happy Dole Dude

    It’ going to happen even if we don’t say it…

    But sadly honesty and whistle blowing have destroyed many a person and people don’t want the truth as it hurts…

    Be careful out there Mac it’s a jungle

  33. Dorothy Jones

    The calendar archive article thingy is gone

  34. Wills

    I agree with mush of the articles main points.

    This though:-

    ‘the government which has already suffered a monumental intelligence failure as the regulators and the central bank have failed abjectly, faces a choice: are the kidnappers bluffing or do they have a nuclear option which they are willing to use?’

    Not for a second;

    Individuals in govt and with the CB and regulatory bodies did know.

    In fact what about the auditors – they knew too.

    Drumm and the lads are being thrown overboard by the scabbard pirates fighting amongst themselves.

    The anglotapes have been in circulation for the last 4 years and used as a leveraging point as the insider factions battled it out to keep their stolen swag.

  35. Wills

    Typo – *mush* -> *much*

  36. Wills

    Also,

    Plausible deniability is a key MO for the scabbard banking pirating professional insiders.

    A classic example of this was our gracious host – David – being used by Lenihan – for him to give the bankster criminal insiders their banking heist demands.

  37. Wills

    The Irish banking system was used by how grown power elites of Ireland to game the euro and game the inter-banking markets and loot, plunder and pillage the wealth of the economy of Ireland.

    Ponzi Rep:

    • Wills

      Type *how* -> *home* grown

    • DB4545

      I mentioned above about the ease with which Conrad Gallagher could be extradited from the USA to face charges in Ireland when it suited the State. If the Irish elites have applied muscle to prevent Drumm & Co. from facing charges and talking maybe it’s time for the Germans to seek arrest warrants for key Anglo personnel/Irish civil servants/Irish politicians involved in the potential massive fraud on European banking systems?

  38. Greetings All

    Tomorrow, Saturday ,I’ll be hanging around the Grand Hotel, Malahide, in the lounge from 2-6 pm and later if someone insists.

    https://maps.google.ca/maps?ie=UTF-8&q=hotel+in+malahide&fb=1&gl=ca&hq=hotel&hnear=0x48671a891bda8a55:0xa00c7a9973215c0,Malahide,+Co.+Dublin,+Ireland&cid=0,0,4019076055501274519&ei=pfDNUamoL8H17Aayu4HQBQ&sqi=2&ved=0CK8BEPwSMAA

    If you can mange it I will love to touch base one more time before I leave for less green pastures!!

    All the best to those others and enjoy the Summer (yes there will be one this year)
    I’ll be around Sunday too, but around Greystones

    Tony
    087 389 7787

  39. bonbon

    Note Chancellor Merkel got it right – “the tone is similar across all the banks”. The time is nigh for the upcoming Pecora Commission. I expect more tapes any moment…

    German chancellor Angela Merkel has intervened in the Anglo Irish Bank tapes controversy, saying such revelations were damaging democracy.
    Asked early this morning in Brussels about the disclosures the German leader said the disrespectful tone towards the wider society appeared to be a common problem in the banking community — in Ireland, Germany and elsewhere.

    “I have nothing but contempt for this,” she said.. “The tone seems to be similar across all banks..

    “It is for us a huge challenge to convince people who get up every day and every day do their work and always pay their taxes, do everything, even show solidarity with other people who are weaker. All of this is destroyed by that and so I have nothing but contempt for that,” she said.

    “For people who go to work every day and earn their money, it is very, very difficult to understand, if at all.”

    Chancellor Merkel drew parallels between the Anglo Irish Bank tapes and “The Raspberry Kingdom”, a play running in Berlin based on post-crisis interviews with bankers in Frankfurt, Dublin and other capitals. http://www.irishtimes.com/news/politics/angela-merkel-says-anglo-revelations-are-damaging-to-democracy-1.1445700

  40. Ryu Hayabusa

    Ah yes Angela.

    She should save most of her contempt for Deutsche Bank when their goings on finally make the light of day…

    Best thing about the Berlin Wall being up was that she was safely ensconced behind it in Leipzig! Germans should ponder on how they went from having a Chancellor like Willy Brandt to the present day incarnation in a quite short period of time relatively speaking.

    • bonbon

      We know all that stuff and more. But she is right about one thing, ALL across the banking sector, and do not forget 1000 Police raided Deutsche Bank last Christmas, and just imagine what tapes THEY found.

      It would be a great service to the Common Good, das Gemeinwohl, to release this. A German Pecora Commission has plenty of room for fun!

      If your are really interested on how this mess was foisted on ordinary people, look up the record on the murder of Deutsche Bank chief, Herrhausen in 1989, just weeks after the Wall fell.
      The Euro was the price of Reunification imposed by Thatcher, Mitterand and Bush. Look at the result!

  41. Pauldiv

    The silence is earth shatteringly deafening and I’ve waited for someone out there to to answer question of the week – Why now and who benefits?

    Like a submarine navigator I am waiting for a faint ping but all I can hear is the tick of the clock as I gaze through the blank page of log book feeling alive and sensually heightened due to the awareness that death can appear suddenly and without warning. Will anyone ever know I existed I sometimes ask myself. It doesn’t matter is the answer I get

    Such thinking is the luxury of anyone who switches off and listens. It is also healthy to take 15 mins every day and reasses the situation. Who am I and why do I exist. That most basic and troublesome question of all

    What am I doing here?
    That is what I used to ask myself all day back in the day when I was jet setting and on the road. Was always on the road searcing and finding and then got tired. You get the picture?

    With the Podge and Rodge performance from Blue Rinse Broon and Fionulla and the Anglo Tapes it has been a poor week for Irish manhood and the Emperor is starkers. Blue Rinse and Shredded Wheat Napper arguing like two old jessies. But life in Ireland is fascinating when you don’t take it or yourself too seriously and humour keeps you sane. It’s hard not to laugh and if laughing is a natural primeal survival strategy then I’d recommend it. They don’t like us laughing at them you know; the serious people

    We also have to remember what we are dealing with here. A rag of a newspaper, an angry two bit political correspondent and a crime reporter who has become a parody of himself in that any one could write the sort of stuff he produces in five minutes flat and without much thinking. Anyone who recognises Raymond Chandler prose will immediately get the picture. ‘Investigative Team’. Yeah right

    I suspect The Anglo Tapes will turn out to be a Weapon of Mass Distraction but in one sense these guys have done us a favour. They have shown us the types of animals in charge in all walks of life and they have shown us that they themselves are among the bottom feeders of a disgraced, censored and completely discredited profession. We are lorded over by a bunch of thugs and seriously screwed up individuals. And I am not talking about the religious

    If Irish people care about being Irish they will not blame me for seeing this as the lowest point of my thirteen years here. It makes me heart wrenching and desperately sad that there is not one person in Ireland I can point to and say: ‘there is a leader. there is someone who wants to start a new culture and flush the old one down the toilet where it belongs’.

    But is also gives me hope. I am hopeful because watching this small nation at close quarters has made me realise that is better to be an honest member of society and work in an ordinary job if you are lucky to find one. I am glad I was never overly ambitious because then I would have climbed the ladder and I am not cut out for life up there. They don’t like guys who can say no and who have to be asked to do something rather than ordered to

    Keep the Faith Irish Brothers and Sisters. We can lead from the front as individuals and free thinkers. We have to take a battering ram to the groupthink mentality and we have to take a bayonet to the neck of the octopus that is currently wrapping it’s tentacles around the voice and psyche of humanity. I dread to think what types of robots will be running the show in 20 years time.

    We have had a 1000 years of oppression and bullshit and only when we saw a ray of light after the fall of the bishops we are now entering what some say is going to be nightmare of hellish proportions. But no-one cares and they can’t see it

    Sorry. I have been thinking too much. Think I will do a couple hours programming and lose myself in code. A man needs interests that will occupy him and keep his brain functioning

    • Adam Byrne

      Good stuff Paul.

    • DB4545

      I hear what you’re saying Pauldiv but why the obsession or fixation with “strong leaders” in times of crisis? I think history shows that leaders have been men/women of straw who got lucky when it was their turn to roll the dice.People have to recognise they are their own leaders. With all we’ve heard and seen and have yet to find out would you trust our so called “leaders” to manage the local convenience store? They’d have it bankrupt in a week.

      We need an effective system rather than some idiot promising bread and circus nonsense and handing out public sector jobs and contracts to family and cronies.I’ve made the point before but why not consider a system that works? Switzerland is one of the wealthiest countries on the planet. It has strong local democracy and effective armed neutrality. I don’t know who the prime minister or president is and I could care less. Do you think the Swiss would give a flying f**k what other countries think of them or that the Germans think they’re the “best boy in class for austerity”.

      We have an over centralised State riddled with incompetent nepotism and cronyism. We have decent creative hard working people being ground into the dirt or being forced into exile.When the crisis came there was no systemic protection and we were at the mercy of reckless incompetent drunks who were fixed up in their jobs by “Daddy”. Nothing has changed. If you put any of the current “leadership” into a world poker championship using our money we know that they would be walking away in bespoke suits and charvet shirts and we’d be left naked. Again. Time for fresh thinking.

      • bonbon

        And I find not a glimmer, a faint flutter, not even a whisper, of thinking in this exchange, only hand wringing, fulminating bile, masquerading as “thinking”.

        Get a grip!

        Study up on Hamiltonian economics, Franklin Roosevelt’s Glass-Steagall, and Reconstruction of a smashed economy. There is no need for more

        Ochon agus ochon o’,
        Cad a dhéanfaimid feasta gan airgead?
        Tá deireadh baincéireachta ar lár.

        End this casino now, break the banks and get on with massive reconstruction.

        • Pauldiv

          Who asked you?
          Shut up HAL!!!
          Just shut up for one bloody minute and don’t be a prick all your life.

          • bonbon

            Starting to fumigate again? Who do you think you are, the great censor in search of the “strong dictator”?

            Now start thinking, a fresh experience!

      • Pauldiv

        I agree. Nepotism is ugly but many people think it is fair play and will put up with almost anything not to be seen rocking the boat

        I have an intern interview at a County Council next week for an IT position. Should be an interesting afternoon. You have got to be seen playing the game :-)

        • DB4545

          I wish you well in the interview Pauldiv. I want you to think about something for a moment before you put all your hopes and energy into an internship which is perhaps better described as a pseudo job. Don’t waste your talent buying into the nepotism and cronyism culture. At least a McJob is honest in describing a low paid job with few prospects. Use those hard earned skills and energy and start a business either here or overseas.

      • Adam Byrne

        Very accurate summary DB4545.

  42. bonbon

    Top Global Management Consultancy Calls for Shock Financial Asset Wipe-Out, Which “Requires an Environment Last Seen in the 1930s”

    The highly-influential Boston Consulting Group (BCG), the world’s second-largest management consultancy, issued a memorandum on Sept. 23, 2011, with a gameplan for dealing with the global financial crisis by wiping out large chunks of financial assets at a stroke, even though this means sinking the world into a deep depression with attendantgenocide. Back to Mesopotamia? The Looming Threat of Debt Restructuring calls for a 34% across-the-board “haircut” in the Eurozone, and a 26% and 27% wipe-out in the United States and the United Kingdom, respectively.

    The 15-page report concludes: “The longer the politicians and bankers wait, the more necessary will be the response outlined in this paper. Unfortunately, reaching consensus on such tough action might require an environment last seen in the 1930s. Things were certainly easier in Mesopotamia.”

    After the B.I.S and JPMC both worte calls for outright fascism, the BCG shows the insane genocidal mood now of an elite faction.

    This BCG study was very much on officials’ minds at the just-concluded meeting of Eurozone finance ministers, according to the Belgian publication Express.be, where “bail-in” stealing of depositors assets was approved as a means to cover for the banks’ recapitalization. Whereas German Finance Minister Wolfgang Schäuble proposed an 8% across-the-board theft, the BCG group, the Belgian publication wrote, “considered that a 30% tax on all assets would be the only way out of the euro crisis. Various economists say that there is no other solution than taking the money where it is: in the accounts of the depositors.”
    —-
    DMcW, this is the real hostage heist. We have now the chance to preempt this madness with radical action of our own, before the BIS, JPMC, BCG radical insanity destroys what remains of the entire economy.

  43. bonbon

    The insanity of the Boston Consultancy Group report posted above show up in the reference to “Mesopotamia”. Have a look at the eyes in this Rembrandt : Balshazars Feast

    The same glint is in the JP Morgan, Bank of International Settlement, and Boston Consulting Group maniacs eyes.

    Thank God we have nation-states and Glass-Steagall now to deal with this!

  44. bonbon

    Does anyone around here do any homework at all? We have John Stuart Mill quoted yet again as “brilliant”! And not a twitch, not a glimmer, no comprehension of the sheer swindle?

    The entirety of the British East India Company’s Haileybury school in political-economy, including Adam Smith, Jeremy Bentham, Thomas Malthus, David Ricardo, James Mill, John Stuart Mill, and so on, are all rooted in the dogmas of Quesnay et al. Marx, too. Virtually everything taught as “economics” in universities today, and virtually everything still accepted as “economics orthodoxy” by most governments and other institutions, is a offshoot of this same pseudo-scientific fustian.
    How Hwnry Carey And The American Nationalists Built The Modern World

    British East Indie Compny Haileybury School and Cobden Club economics to be foisted AGAIN on Ireland. Not likely mate!

  45. bonbon

    More tapes! Have ye seen the reports? The timing is perfect!

    • Pauldiv

      What reports and what timing HAL?

      Total crap on your part friend. Your batteries are obviously getting low and we need to haul you in for repairs son. You are not winning many hearts and minds and you are clearly a walking asylum

      Why is this art and why is the timing so sweet my little dooshbag?

      Come spit it out son and let us be seduced by your ‘wisdom’

      Personally I think you sound like a 19 year old in his / her bedroom trying to start a riot. That’s what it sounds like. Control yourself. You are getting no-where fast and wasting your talents in that Larouche Pac mind prison. You are a brainwashed nut case. Switch off and masturbate and give us all a little peace db. Or perhaps you are already too far gone son

      Hallo! Hallo!
      We are the silly boys!!

      Of course there are more tapes you simpleton. You think we never thought of that or are you trying to impress us laddie?

      You silly wee boy.

      Thousands of hours worth of dialog no doubt including the drunken slob Cowen and his mentally incapacitated corrup as fuck cronies. Your future bosses and their up and coming ‘Little Fianna Failers’ have a stake in all this shit and I bet they are bricking it. ‘Fail’ being their modus operandi. If someone votes for mainstream parties and attends chapel in 2018 then they are well suspect. In fact I would label then as mentally ill and untrustworthy. Dodgy as fuck. I would be reluctant to even SPEAK to such people and I mean this sincerely.

      The Irish are evangelists of hate and parochial stupidity and bigotry and no more advanced than the nut cases who controlled and evangelised on behalf of the Church of Scotland in the 1920s and 30s when they were at the height of their obscene powers with Glasgow Rangers sweeping the boards in front of the king as their mascots and cheerleaders lorded it over the Irish whores. Ireland in the 21st century is more backward and and less capable of rehabilitation than the bitter Ulster Scots of old. And that is my biggest fear

      Let them feel superior. We will have our time in the sun but not as long as we are consumed by parochial bs. That is the whole trap!

      Old ‘Drummer’ and da lads are laughing at you all. You spineless saps. Hostages indeed. Are you going to bend over and take it all your life are you going to do something about it?

      Posting links is not productive. The new form of street politics taking place in Brazil shows that people are adopting new strategies that can work and achieve a reversal in policy. But we don’t do rioting because we are superior to these ‘animals’. Typically Complacent Irish attitude. Sit on your arses while others get their heads cracked open. You all make me ill sometimes especially when you talk about me me me. When ego makes you feel superior to the land of your birth and you family and friends then that it the moments you lose touch for good. Don’t do it.

      Preferring the silent misery of that precious mortgage and saving face is more important than standing up for what is right. You are constantly bullied by the bullying neighbours and family in front of whom you prefer to save face instead of telling them to piss off and mind their own business. You shameful ‘debt dodger’.

      These spivs cut the juicy bits and carefully planned their assault strategy and the timing of this premeditated attack on someone or some entity is the biggest clue of all. Or maybe they are just in the business of shifting newspapers. It would not be surprising. They are whores who believe in their own legend and they give each other nickanmes. Like ‘Drummer!’

      Stop swallowing all this tripe and pay for a real dinner.

      Just as Enda is about to ask Fritz for another dig out. Come on to fuck. There is serious skullduggery going on here

      Some scum bag with a black book as thick as Meyer Lansky’s is asking for payback from persons and or entities unknown and it stinks. The question is how can they stretch the truth so far this time so that even the thick paddies will swallow it. You are being rode over a barrel and still you don’t give a damn!

      These silly little boys don’t know what they are dealing with. This is not some traveller family living by the road who take kindly to tossers like TV3 cameramen probing their noses into corners they are not wanted. I would not be surprised if your man Williams ends up twisting from a rope. Him and his like as just as despicable as their prey and probably more stupid, ignorant and useless than their easy prey. Stop feeding them and stop buying papers. Simple. Starve them at the neck

      Be very careful of this guy and Shredded Wheat Napper. Just stand back and comtemplate them and tell me what you see

  46. DB4545

    Jesus Pauldiv you have it bad. On the upside once a century on average (1690,1798, 1916)we decide enough is enough and we go tits up. We’re getting close to that time again. And I think there will be blood on the streets. And unfortunately as ever it won’t be the blood of the assholes who have caused this disaster.

    • bonbon

      You fail to mention the problem then, empire, also now, the global British Empire.

      Pussyfooting around this with Tiger correctness is amazing. It is time for impeachment, breaking up a financial tyranny, and reconstruction on a scale never before seen.

      • Now the financial banking families empire. Not much British about it anymore. You mislead again with your British phobia.

        Focus on the money masters and the bankster elites

        • bonbon

          Rome was not really Italian either. The British Empire includes the Royal Saudi operation, the one that did 9/11. Obama serves this as did Bush.

          Clearing up some monetarist confusion. Money is one major part of empire, the other is population reduction, culling (they all practices that), genocide.

          It would be just a little bit silly to be eliminated while counting their coins, now would’nt it?

          • Focus on where the problem is and give it the proper perspective. It is diversionary to keep calling it the British empire and you are also fixated on monetarism quite rightly as the problem but you lay it at the feet of the wrong people.
            you create the confusion by using such terminology. You have good insites on the problem but turn potential allies into adversaries with this adversarial approach.
            Reasoned debate will establish commonalities and differences can be discussed and misunderstandings perhaps resolved.

            We all wish for a resolution that does not involve undue hardship and difficulties for the people. Ideology needs to be abandoned for reasonable discussion. Sometimes there is no easy solution to a problem

          • bonbon

            Still refusing to face the long history of empire. The confusion is created by the obsessive bedazzlement with metal and notes, mere expressions of Empire. That Empire is very clear about its objective, massive population reduction, using metal or notes as necessary. Glass-Steagall and Hamiltonian Banking are the nationalist economic answer to global tyranny.

          • For a reasonable bright person bon bon you are incredibly stupid.
            You can not think beyond your indoctrination.

            I an other have offered an olive leaf now and then to have a reasoned discourse but your response is always the same.

            So take a hike bon bon you are not to be considered anything other than a charlatan from this point on.

          • bonbon

            Who the hell do you think you are with “olive leaves”. Eat them.

            Now back to reality. Everything I have stated is documented and there is only one explanation for your apparent “stubbornness”.

            Potential allies can decide for themselves whether to serve empire or crush it. No wiggle room. Splitting the banks with Glass-Steagall will crush this tyranny, and they have declared any attempt by Washington a “hostile act”. Is that not clear enough for even the most bedazzled Austrian Schooler?

          • I am a reasonable person bon bob but you are a moron dressed in a cloak of intellect.
            You never explain anything as you are incapable. Never answer a question as you have not the answer. You masquerade as a LaRouchite.
            You shoot the messenger and do not heed the message.
            You blame the gold standard for QE to infinity. Tick as two planks!!
            You scoff and demean. The only person on the site to do so as others offer opinions.
            Twit.
            I’ll be enjoying a boat ride and a chat. Then a bike ride and a visit so do not bother to respond as it will be unread.
            I’ll just watch as the sensible of the world accumulate real tangible money and get rid of the paper script.
            I’ll watch the squabbles over who said what to whom and do what I need to protect myself from the coming debacle. I will see my friends and develop community. We will survive and prosper.

            I’ll watch the inflation in the money and the deflation in the real economy (I recall you scoffing at that before someone get you a triple curve to wave to passers by ).

            I’ll go get a couple of real money coins and listen to the melodious ring as they jostle in my pocket and think of you with your depreciating credit notes. I’ll have pity on you for your lack of understanding. Not your fault. It is the education system and the people you associate with. It put you on the wrong track. Too bad.

            Well days are getting shorter and the financial storm approaches. By the time of the winter solstice it will be apparent and the protection from this storm will hold and we will emerge better and stronger and the next spring will be a real Spring. Warm refreshing and the land will be good.

          • Colin

            Allahu Akbar! There is no Economist but Larouche and bonbon is his messenger!

        • Dorothy Jones

          You complain about something you actively encourage and then flounce off on something or other bike or something. Co-Abhängigkeit, Enabling

      • DB4545

        The global British Empire? Get a grip and discard the anti-British nonsense. Don’t tell me that as an adult that you still believe the christian brothers perspective on history that you may have digested for your Inter Cert? You sound like Robert Mugabe trying to blame the “Imperialists”. We’re big boys and girls now and we’re responsible for our own f**k-ups. We’ve allowed a social network of cronyism and nepotism to govern for three generations on the implicit understanding that somehow they are our “social betters”. When the iceberg hit the ship we found out that the private schools didn’t produce some über humans who were born to rule, they delivered the same product as every other school but with that annoying false “Dort” accent. We don’t need grandiose idiotic schemes, this isn’t postwar Germany bombed to ashes. We have a creative intelligent flexible population who have demonstrated that they will go to the ends of the earth to work hard, we have a reasonably good infrastructure and a decent road network. We just need to f**k these wasters out on their ears by peaceful means and introduce reforms so that we have local accountable democracies.

        How do we do that you may ask? Vote with your wallet or your purse. Move back to cash where possible. Don’t put your hard earned money or savings into institutions or businesses who have conspired to rob you blind. Vote for fresh faces at election time. Regardless of the political spectrum if a candidate has family history in politics don’t vote for them. And keep changing them. Most people who aspire to be politicians are happy to dip into the till of taxpayer resources for themselves, family or cronies. It may just be human nature. Your job as a Citizen is to limit the damage they can do. Hire and fire them frequently. They make relatively little difference in the scheme of things. Except when they become embedded. And we’ve all seen the dangers which result. Think I’m wrong? The Dail will adjourn shortly and the country will still go about its business without them.

  47. David,

    That is not a bad analysis of the crisis and a good explanation of the maturity mismatch. However, it seems to ignore how money is created in the first place and it’s not really the case that people deposit money in banks who then keep some aside and lend out the rest.

    Instead money comes from bank loans. Once a loan is approved a bank types new money into the borrower’s account and this is how most ‘deposits’ are created. It’s also why every ‘deposit’ has a matching debt.

    In fact with the charging of interest it’s impossible for all loans to be repaid and unless the money supply increases exponentially the system will run into problems.

    If you’re looking for a solution to our financial problems, and out environmental and social problems too, why not have the central bank create debt-free digital money for the government.

    Then have banks deal with existing money only like you seem to think they do. This would resolve the problems of banks deleting money through loan repayments aswell.

    • bonbon

      I’m afraid the “It from Bit”, magical handwaving is merely that, smoke and mirrors. Your monetarist obsession blinds you to the physical economic collapse best understood with the Triple Curve.

      “It”, the real economy, will not spring spontaneously from “Bit” digital money. This is EXACTLY the Hayek Austrian School swindle of “unknowable”, “spontaneous” economics from “sound money”, and EXACTLY the Keynes’ “animal spirits” exuberance touted by Sir Alan Greenspan. Interesting how the swindle runs right across the Empires monetarist spectrum, is’nt it?

      Note the physical collapse – and address it please. Silence on this is public incompetence.

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