October 28, 2013

Plucky little Ireland' spiel is pure guff

Posted in Banks · 115 comments ·
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Capitalism without bankruptcy is like Catholicism without hell. Although he didn’t say as much, this is what Mario Draghi meant when he announced this week that he was prepared to see banks go bust in order to clean up the balance sheet of Europe’s ailing banking system.

This means that Ireland, even if it exits the bailout, is still, if not quite in purgatory, then at least in a limbo-like state, because it is almost certain that at least some of our banks still need more money.

The EU is also envisaging that burning the bondholders will ultimately happen all around Europe in cases where banks are bust. This is obviously something that the ECB refused to countenance in Ireland – and it means that Ireland will have been hoodwinked.

In recent weeks, Germany has moved to protect its taxpayers from picking up the tab for non-German banks’ losses. This is despite the fact that, by definition, being the country with the largest current account surplus in Europe means that Germany had to have been the biggest lender in Europe and, therefore, has some culpability for where it lent to, though clearly a lot of blame lies in bank boardrooms and regulators’ offices too.

And if the Irish taxpayer had to foot the bill for debts that we had nothing at all to do with, then German taxpayers should do likewise. If this is not followed through, then the logic of all citizens being treated equally in the EU falls down.

This volte-face where rotten banks will be let go is bad news for us because obviously, we have already put money into our banks and we – unlike Italy and Spain – didn’t benefit from Draghi’s LTRO (long term refinancing operation) which was announced in 2011, a year into our bailout programme.

Back then, before Draghi, Ireland was pushed around and implicitly threatened that the ECB would cut off liquidity to the Irish banks if the state didn’t come in and shore up bondholders’ losses. The ECB policy was based largely on the notion that Irish banks couldn’t go under, because that might cause contagion all across the eurozone banking system. This could be termed the Trichet doctrine and it centred on the rule that no banks would be allowed to go bust in the crisis.

Now that Draghi’s LTRO has worked in terms of easing the immediate crisis in Spain and Italy, the new doctrine is saying something quite different.

Draghi is saying that next year there will be a fresh round of stress-testing of European banks – including our own – to see if, in the worst case scenario, they have enough capital to survive. Banks that do not have enough capital will be forced to go and raise money. Now here is the rub for Ireland, because he went on to say that if they don’t raise the capital or can’t, they will go bust.

In an interview with Bloomberg, the ECB boss said that ”banks do need to fail to prove the credibility of the exercise. If they do have to fail, they have to fail. There’s no question about that.”

Draghi went on to say that he’s sure that the region’s governments will be ready to fill any capital holes that emerge as a result of the stress tests.

”I have no doubt whatsoever that backstops will be there, which doesn’t mean that they will have to be used, because first and foremost it’s private money that needs to be used,” Draghi said. ”There’s an explicit commitment to have in place proper, adequate national backstops by the time the exercise is being carried out.”

Now if we read this carefully, it is saying to the Irish government that the Irish taxpayer will have to stump up even more for the banks. Mr Draghi may have no doubt about the government’s willingness to do this, but I do. I doubt the Irish state has money to plug holes yet again in the banks.

And it is precisely because we don’t have the money that the extra Euro 10 billion post bailout exit ”credit line” comes in. The government will be forced to take on an extra Euro 10 billion credit line – which will be drawn down if the Irish banks need more capital.

All this means is that the Irish taxpayer will be on the hook again and, amazingly, it is being dressed up as a victory, when what is happening is yet another bank bailout.

This is all a far cry from June 2012, when the Irish delegation came back from Brussels with a game-changer. Not only was any new capital for the Irish banks going to be injected by the European bank fund, the ESM, but we were told that we could claw back some of the money we stumped up because we were seen to have ”taken one for the team”.

Do you remember that? Well, now it looks as if that too will be reneged on, and Ireland’s taxpayers – having just come out of a bailout – will regain their sovereignty to give it away again, in the form of a forced loan to be paid for by future generations to pay for the banks today.

So all that guff about plucky little Ireland being rewarded for being a good boy is just that – guff. The Americans have an expression: ”You don’t get what you deserve, you get what you negotiate.” And we threw it away when we had the ace – when we were contagious.

Rather than using our contagion to extract concession, we turned it against ourselves. What does the clever leper do when he is knows he has the disease? He threatens the healthy folks that he might join them for dinner unless they give him something, to go away, that’s what he does.

But we didn’t do that when we were a hazard, we went away and we ended up losing our opportunity.

Now, from what we are hearing coming out of Brussels, Frankfurt and Berlin, the notion that Ireland would be rewarded with a post-dated cheque is in the dustbin.

According to the new Draghi doctrine, banks would be given time to raise the required funds if the stress tests deemed that they need capital. Initially, banks would try to raise money from private investors. But who is going to invest in the likes of AIB, with a mortgage book timebomb about to explode in its face? And if the investors don’t come in, who does?

Well that’s where you enter the drama.

Germany is moving as fast as it can to ringfence the ESM – the European slush fund – as much as it can. I don’t blame Frau Merkel for protecting her own people, that’s what national politicians are there for. Or at least that’s what I thought.

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  1. Dorothy Jones

    I did a project in Hamburg Jan-Sept this year and attended the Bundesbank Forum presentations when living there. The slides on the EU Banking Uebersicht/Control from 130923 are in German and on the link below. Interestingly the speaker referred to the fact that the Wild West IFSC incidents lead to its formation.
    As the speaker mentioned that there would be Bail-Ins in future winding down of Banks a la Cyprus without a burden on taxpayers, I asked whether this model would be applied to Anglo. Answer : No.
    The heart of the rot in Germany’s economy is the very little publicised mess concerning Schiffsfonds in the secretive north. I got information on this and on the Deutsche Pfandbriefe from those trading the products.
    Ireland’s people do punch way above their weight. Irish politicians are shite without a pair of balls between the lot of them.
    However, burning the bondholders is not an option as long as the case Argentina in NY remains unresolved, link below also.
    http://www.reuters.com/article/2013/10/26/usa-court-argentina-idUSL1N0IF1TU20131026
    http://www.bundesbank.de/Redaktion/DE/Downloads/Bundesbank/Hauptverwaltungen_Filialen/hms/forum_bundesbank_praesentation_2013_09_23.pdf?__blob=publicationFile

  2. Adam Byrne

    Subscribe.

  3. whatamess

    stress testing is simply not the tool needed for this job.We’ve seen “how Italy’s tenure rates went from 5% to 6% they went from perfectly stable and fine ,to a full crisis ,in 100 basis points.”

    just shows how fragile this ‘system’ is

    Draghi knows this house of cards is about to fall. Fall on the heads of the public coz they will be forced to foot the bill,again!

    split the banks …say no to the gamblers

    • whatamess

      the Americans have another expression too (when playing poker)

      “if you can’t spot the sucker in the first 5 minutes of joining a table,YOU ARE THE SUCKER!”

      We sent secondary school teachers to negotiate with wolves!

      • whatamess

        “and it takes a wolf to catch a wolf !”

        20 seconds
        http://www.youtube.com/watch?v=Ktv9cY2RR00

        • DB4545

          What result did the Irish electorate expect when you had a couple of schoolteachers and trade union officials negotiating with Frankfurt? Angela Merkel serves German interests and the people who elect her and pay her salary. Our Gombeens serve German interests and the people who they hope will pay their salaries and future pensions. One gentleman was blunt about this when he stated “When the facts change I change my mind”. In fairness you could argue that they got a great deal when you recognise that the negotiations were between employee and employer.

      • whatamess

        “negotiations were between employee and employer”

        or

        between slave and master ??

        • DB4545

          That could be argued whatamess but who knows what nice little job offers could be available down the line in Europe? Save these banks a few billion Euro and all sorts of opportunities may present themselves for the Gombeens or their offspring. It’s nothing personal you see, these are career politicians and they’ll work for the highest bidder. These people are gambling with our chips so we’re the suckers. I think we have no illusions that they’re working for the Irish electorate.

    • joe hack

      “say no to the gamblers” just say no- it was advocated here this week that banks should lend to people who “need” want new cars – just say no! “and the drugs don’t work” – this The Verve song is about cancer – how apt..

      http://www.youtube.com/watch?v=1MPBfSMrAO4&noredirect=1

  4. joe hack

    ACC is gone – where will the farmers bank now and Osborne is trying to figure out what to with Ulster Bank – that could hurt.

    Don’t forget to put your clocks back – if you can – put them back several years it might help as hindsight would then become predictive-

    • joe hack

      Update – ulster bank may be spared the axe …

      “Soft landing” echo or tinnitus…

      “Mr Osborne has personally highlighted the problems caused by Ulster Bank, leading to repeated speculation that the division would be wound up and RBS would pull out of Ireland.”

      I wonder did he include car loans too…

      TOXIC

      “Advisers from Rothschild have been hired to prepare a report on RBS, while US asset manager BlackRock has been analysing its £54bn (€63bn) “non-core” portfolio of toxic assets.”

      The Rothschild it’s sure end or continue in tears.

      http://www.independent.ie/business/irish/ulster-bank-to-escape-axe-in-rbs-restructure-29704432.html

  5. michaelcoughlan

    Hi David,

    When I read this article my mind drifted back to the interview with Brian odriscoll on the late late recently. Like Bono odriscoll seems to draw the ire out of some people. I think perhaps people view Brian and Bono in the same way ie very succesful in their respective fields but hopelessly wawah with pretention. Having played the game myself at a reasonable level I know how honest brains play is, his work ethic and performance levels are also first class so I find criticisms of him rather churlish.

    With regard to this article there is uncompromising Honesty WITHOUT the slightest hint of pretention. When I read it I felt I had just been hit with a sledgehammer.
    It encompasses so manny different vitally important observations one response alone won’t suffice to examine eacjh in detail.

    One line alone which ads so much integrity to the piece is your own observation of the possibility that you had misunderstood the nature of the motives of our politicians. This alone sets you apart from so much other verbiage because you have demonstrated
    your capacity to not allow your own ego to get in the way of everyone around you including yourself of arriving at a clearer and truer representation of the realpolitik of the situation now facing the people who live in failed Eire.

    • michaelcoughlan

      “he was prepared to see banks go bust in order to clean up the balance sheet of Europe’s ailing banking system”

      I presume youean the balance sheets of manny of europe’s governments since they own manny of the banks.

    • michaelcoughlan

      “if the Irish taxpayer had to foot the bill for debts that we had nothing at all to do with, then German taxpayers should do likewise”. Very naive. It isn’t going to happen simply because a duality exists.

      “If this is not followed through, then the logic of all citizens being treated equally in the EU falls down”

      It doesn’t fall down at all. Neither citizens or governments are treated equally.

      1) The Irish Govt has been consistently been pissed and shit on.

      2) Millions of unborn European citizens are exterminated every year in wombs (unlike gas chambers) not because they are Jewish but simply because they are not 5 months in existence.

    • michaelcoughlan

      I think we need to reflect on what you said before David. Debts that can’t be paid won’t be paid. That’s when we get back our leverage back.

      We should reflect that we now must act to save our kids from emigration and penal levels of debt payments.

      Michael.

  6. markodxb

    Exactly David, why should Merkel care about the suffering of irish tax payers, she must protect her own. is there any reason to hang on in the EU club when we are obviously held in such low regard? Would the EU have any concerns if our ‘Leaders’ had the backbone to threaten to quit the EU club and walk away from the dept. Would the people of Ireland support our ‘Leaders’ if they had the balls to do it.. (& i know this is an unlikely event but I would be interested to know what you all think out there)

    • markodxb

      above i meant ‘walk away from the debt…’

    • Our Govt Don’t have one pair of ball’s between em DMW Doherty Jones Got It Right .
      Ireland haven been pricking about for 5 years now turning corners announcing game changers historical moments Paul Danniels couldn’t hold a candle to em.
      The greatest Allie EU ever had In screwing Ireland Is the Irish Govt Itself.
      When they had the hand grenade Instead of threatening to throw it they put the pin back Into It. Not alone that unbelievably they make bank debt sovereign Forever? As for getting Investors for AIB I wouldn’t put a pair of dirty socks into It,

  7. DMcW: ESM – the European slush fund

    +1

  8. “that’s what national politicians are there for. Or at least that’s what I thought” There is no chance that the Permanent Government might put its much longer-term interests at stake and allow the Temporary one to do this.

  9. Paul Divers

    “Plucky little Ireland’ spiel is pure guff”

    That is what I call a headline.

    I am very busy on a project but that headline pulled me in.

    I might read the article later.

  10. Pat Flannery

    You can hardly say that Ireland was hoodwinked when it was the Irish political class that nationalized the Irish gombeen-developer class debts, in the form of bank-issued bonds.

    Blaming the Great Irish Financial Crisis on Germany for having allowed this Irish gombeen-developer class to profiteer during the Tiger Years is like blaming the Quakers for the Great Famine for having given up and left Ireland in exasperation when they saw their relief efforts being hijacked by the Irish gombeen-famine-profiteering merchant class of the 19th Century.

    The true history of these first decades of the 21st Century will be that the Irish political class represented and protected the 21st Century Irish gombeen-developers, who hijacked the easy money pouring into the country and profiteered with it throughout the Tiger years, just as the 19th Century Irish political class represented and protected the 19th Century Irish gombeen-merchant class, who hijacked the famine relief pouring into the country and profiteered with it throughout the Famine.

    Today’s gombeen-developer class is now hoping to blame the Germans because their 19th Century gombeen-merchant counterparts succeeded almost 100% in blaming the English for the Great Famine.

    But this time it may not work. Even David McW is beginning to see that maybe the ECB (Draghi) will not be able to force the Irish nation, or any other European nation, to provide the “proper, adequate national backstops” he knows will be necessary to fill the gaping holes that will shortly begin to reappear in the balance sheets of national banks like Ireland’s AIB. The bank guarantee and the bailout merely postponed the inevitable.

    Clearly Germany is not the cause of this Ireland’s Great Financial Crisis. The doctrine of blindly guaranteeing every bank-issued bond is the real cause, just as the doctrine of laissez-faire was the real cause of the Irish Famine.

    England was a cause of the Irish Famine only insofar as Lord John Russell’s Whig government could not see beyond its blind adherence to a misguided economic doctrine. That is not the case with Germany. It, more than any other European nation, understands that elevating bank balance sheets to a religion is a recipe for a Famine-style disaster.

    Unlike England, Germany is not dependent upon its banking industry. Germany is a manufacturing nation. England, which DE Gaulle once called a nation of shopkeepers, is now virtually a nation of bankers.

    Contrary to what you may read here or in the general Anglo-Irish media, Germany will be delighted when, not if, Ireland lets the AIB fail. It is the Brits that will squeal like pigs because it was they, not the Germans, who pumped the AIB and the 21st Century Irish gombeen-developer class full of bank-issued bonded debt.

    The next British-Irish battleground will therefore not be on the Falls Road or in the Derry Bogside, it will be on the balance sheet of the AIB. England has a habit of fighting its European battles on Irish soil. Just as the 1690 “Battle of the Boyne” had decisive European implications, so will the “Battle of the AIB”.

    • very incisive thinking Pat

    • DB4545

      The British don’t have permanent friends or permanent enemies they have permanent interests and be in no doubt they will act to protect those interests. If that means paying off a few politicians and using the Irish taxpayer to fund the payoff that’s what will happen. In that context in future negotiations you have to pick a team who you think are capable of playing hardball in the political and business world. You have the following choices.
      1. Enda Kenny
      2. Michael O’Leary
      3. Pat Rabbitte
      4. Brian Cowen
      5. Micheal Martin
      6. Martin McGuinness
      7. Joan Burton
      8. Michael Noonan
      9. Gerry Adams
      10.Eamon Gilmore

      Pick your best three.

      • Adam Byrne

        O’Leary, McGuinness and Adams.

        The rest of them are useless.

        • DB4545

          It’s not rocket science Adam. But it is scary. Could you imagine including two in particular twenty years ago? That’s the world we really live in. The rest ain’t worth a pitcher of warm spit as one American President once said.

        • michaelcoughlan

          Hi Adam,

          I picked the same three before I saw your post.

          I know now why I have been minding my kids for the last five years;

          I didn’t kill enough people.

          • DB4545

            Well we know which three are proven to have balls even if one of the ten sounds like she she does. The particular three have a proven track record in asymmetrical warfare against opponents with vastly superior resources. Please note this is not some anti-British rant (I’m very fond of our near neighbours and we have more in common than we think). Nor am I some tricolour waving shinner. But we live in the strangest of times and we need capable people who can think outside the box and make efficient use of scarce resources.

          • michaelcoughlan

            Hi db4545,

            I never thought I would hear myself say this but I actually agree with you.

            Michael.

          • michaelcoughlan

            Hi db4545,

            …..as in your point re the three people to pick.

      • Colin

        What about these 10;

        1. David McWilliams.
        2. Michael O’Leary.
        3. Ed Walsh.
        4. Willie Walsh.
        5. Constantine Gurdjiev.
        6. Paul Sommerville.
        7. Michael Flately.
        8. Paul McGuinness.
        9. Stephen Donnelly.
        10. Roy Keane (with glare which scares Glaswegians).

        • whatamess

          4

          5

          10

          this concluded the voting from whatamessss

          • Ryu Hayabusa

            I demand Enda, Eamonn &Mickael, those stanchions of sagedom be added to such a list! :D

            They’ve torn up the manual on leadership.

        • Tom Crowley

          A Chairde (for Paul below )
          Colin you make the point I wanted to express.Its up to the people who they have on that team. BB4545s team list above is not necessary.It has cost us to have a few ex school teachers but it is the people gave them the vote. The strongest if not the only tool we have is our vote. Again I see boycott in numbers against the banks being mentioned here. Some here abdicate the right to vote indeed the storm from Russell Brand is still lingering.
          Micheal Coughlan you need to put your hand that you offered to the wheel by starting a conversation in your area. A network needs to be set up to support local communities taking the democratic mandate of the people to local and national level. Anyone who does not want the private policies of Mr Draghi’s ECB to be the public policy is asked to get involved. Anyone who thinks its time to end the rule of the political parties of vested interest over the people of Ireland is asked get involved. The first step in this process is going to happen at a public meeting in Cork next Wed 6th November.
          Here is the link
          http://www.cppc.ie/wp-content/uploads/2013/10/2013-10-20-CPPC-A6-Flyer-for-Meeting-in-Cork.pdf

    • Clear thinking, Pat. I agree with your analysis, with only a minor caveat. Which is use of the word ‘British’ and a simple conflation of British with England or Scotland. Poor Wales doesn’t even exist anymore as a country and is just a ‘Principality’, whatever that’s meant to be. Sorry, Taffy, but those is facts.

      There’s no such identity as ‘British’ for many of the people on this island, and only ever was amongst elites and their conscripts. Liverpool, Manchester and Birmingham have always been seditious. As has Yorkshire and elsewhere. There’s the Norman Toraigh Coalition (Tory-Liberal), there’s the Royal and Aristocratic landed gentry Blood-lines, and there’s the bankster elite of The City of London. All self-interested isolated bastions of unwarrented Privilege, which replicates over generations.

      Yes, over the centuries various traitorous elements of “the Saxon foe” betrayed the Shires of Mercia, but things will reach boiling point on this island next year if Scotland decides to break loose. Or if it doesn’t.

      It seems as if the D4 Canary Dwarf crew have set themselves up a nice little replica of their Norman bedmates in London, and have the same incubus-succubus blood vampire approach to Outsider Ireland as The City of London has to the rest of Outsider England, Wales and Scotland. And the whole world! No surprise whatsoever that they’ll go to drain the neck of the taxpayer for another bail-out again as soon as Dracula Draghi bares his fangs and instructs them. Northern Ireland is a complicated special situation, but it’s fate will be decided as much by the Scottish referendum as anything else.

      In the same way as the idea of Britain and the “British” threatens to implode over Scotland, there’s also the developing the HS2 farrago, where the SE Elite want even more wealth and privilege and a new runway at Heathrow rather than C21st infranstucture for the whole island. They may as well declare themselves Singapore 2.0 and have done with it.

      The same concentration of wealth and power and infrastructure around Dublin will accelerate during the next wave of crises. Mind you, London’s looking a lot like Tokyo in 1989, so the denouement could be spectacular, even if it probably also takes Ireland down as well.

      Anyway, the very notion of ‘Ireland’ as a Sovereign Independent Republic is suspect after ‘Ireland Inc’ & The Troika. What a centenary is looming for the ‘soldiers of destiny’! After booting the London elite out, only to let hand control first to Rome then to Brussels-Frankfurt-Paris. That’s some Republic! It’s going to be essential to have hard-hat poker players at the table when the Celtic Corralito threatens to unfold. I’m sure there’s other patriotic candidates who will rise to the challenge once it becomes clear that not only has the crisis not ended: it hasn’t even begun in earnest.

      Now, I must go and finish booking for trip to ancestral Kilkenny & Laois next week. I hear there’s always some good entertainment in Kilkenny of a nightime. Might pop down and see if anything of interest is happening, any good chat to be had in a few bars.

      All the best to one and all.
      ‘mad plastic paddy Peaky Blinder in Brum’, etc.

      [sent by air-mail from the Independent Republic of Mercia. *wink*]

    • petrapig

      Excellent
      The next British-Irish battleground will therefore not be on the Falls Road or in the Derry Bogside, it will be on the balance sheet of the AIB. England has a habit of fighting its European battles on Irish soil. Just as the 1690 “Battle of the Boyne” had decisive European implications, so will the “Battle of the AIB”.

      Pat,if you put that to tune and we can all have a sing song while we head down the swanny with no paddle of leadership.

  11. whatamess

    “…in the form of a FORCED loan to be paid for by future generations to pay for the banks today.”

    DMW writes- “Draghi is saying that next year there will be a fresh round of stress-testing of European banks ,including our own , to see if, in the worst case scenario, they have ENOUGH capital to survive.Another “optical backstop” as Kyle Bass called it.

    VIRTUAL ,

    NOT REAL!!

    And there’s NO way of knowing or computing or anticipating how much ‘buffer’ is “enough $” !! And with the level of volatility in the markets and possible “black swans” under the surface,this stress testing ( while v.worthwhile as a single component of MANY financial regulations ) doesn’t provide the tax payers with sufficient and REAL protection. Draghi knows this reality,the “what is”, of the current situation and as Al Pacino said “when the bough breaks the cradle will fall and it has fallen here”. The game is up and Germany know it

    Alan Greenspan adapted his economic policy to guarantee bank rescues,with implicit promises of a backstop—the now infamous “Greenspan put.” These policies proved to have GRAVE delayed side effects. Washington stabilized the market with bailouts and by allowing certain companies to grow “too big to fail.”
    (from “The Black Swan of Cairo”)

    http://fooledbyrandomness.com/ForeignAffairs.pdf

    very interesting stuff,i say:)

    the wolves are at the door everybody…don’t you sense it ??

    split the banks !

    • michaelcoughlan

      Split insolvent banks? Why may I ask? Let them fail and set up new ones independent of each other.

      • whatamess

        Banking debt becomes sovereign debt

        and the tax payers are footing the bill and will continue to pay these bills,for genrationS to come until the banks that are engaging in risky investments with their “instruments” are no longer given this safety net

        Only 5 “too big to fail” MEGA banks control nineteeeeeefiiiiive % as ive written before

        no risk management needed

        what risk?

        secured or NOT , this one armed bandit always pays out

        ignore that ,at your peril

        • whatamess

          i’ve posted this link a few times

          25 mins but very revealing
          http://www.youtube.com/watch?v=rsCGI7s1SBg

          and if you’ve an hour to burn

          http://www.youtube.com/watch?v=5V3kpKzd-Yw

          Dont have an hour???then fast forward to 55mins and watch Ireland!

          • DB4545

            Thank you whatamess for those links. Mr. Bass stated it bluntly, he’s paid to be a realist. Six trillion dollars created from fresh air in Europe and the USA. You really can’t hate the mirror because your ugly. There’s nothing like the truth and it ain’t pretty. Jesus H Christ.

          • michaelcoughlan

            Thanks for Kyle bass first video. Around 20.00 the point is made clear that the best place for money is guns and gold. He makes no mention of splitting the banks.

            Respectfully,

            Michael.

          • whatamess

            Michael,Kyle is not a kamikaze,right?
            in his case,”don’t hate the playa,hate the game,yo !”

            Why would he want these ‘instruments’ that make him rich,be stripped of Hayman’s safety net

            ( risk assessment ,eh…no brainer! )

            Anyway..

            more of Kyle( if you haven’t already overdosed ) but a little more recent….from March 2013

            http://www.youtube.com/watch?v=JUc8-GUC1hY

            it’s not a great idea to use linear solutions to deal with non linear problems

            the “Keynsian endpoint” is imminent …

            then Kabooooom!!!

            in DMW’s other article today :
            “Economic history tells us that things don’t last forever, long periods of very low interest rates are followed by periods of higher interest rates and higher interest rates will render the present worldwide policy of printing money null and void.”

            This isssue of “optimism bias” is clearly very REAL!!

            it’ll never get worse than what it is now!!! heard that wan ??

            it’ll never happen here !
            Watch the budget annihilate the weak and vulnerable in society

            http://www.youtube.com/watch?v=JUc8-GUC1hY

            nite all

          • whatamess

            and Michael,

            the gold and guns bit is at the very end and is just a “euphemism” ,as he says??

            did you,conveniently, miss the other hour of content?? e.g.the graphs that show Ireland in a state of disrepair beyond fuckin belief!Did that escape you?

            Michael,

            ya’ll listen to Jimmi ,but you cannot HEAR jimmi ! ;)

            1 minute
            http://www.youtube.com/watch?v=HauMNRzhyJQ

          • michaelcoughlan

            Hi whatamess,

            I don’t know why your kicking off. I agree with you the banks need to be split. I just don’t agree with your timing.

            Kyle Will make money whether there are shields or not in place.

            By the way he runs a hedge fund which means he always takes losses as well as profits. His aggregate is what comes out in his favour.

            France Japan UK all fucked!

          • Ryu Hayabusa

            I don’t wanna hear that kinda defeatist crap, I want yez upbeat… Upbeat i tells ye!

    • Ryu Hayabusa

      Uh Huh, these continuous rounds of stress tests are nothing but a farce.
      Each one is supposedly giving a definitive outcome at the time… which is subsequently airbrushed into history.

      “The Barbarian’s are at the gate!”

  12. paddythepig

    The Irish population had everything to do with the bank debt. They borrowed the money, and then spent it like drunken fools.

    • Tony

      Great contribution there paddy. Somebody called me an arse-hole the other night. But I guess he didn’t mean me, he meant everybody in the pub I was in, just because they were in that pub.
      And when I call you a fucking idiot, I must mean everybody who reads this column, so don’t take it personally.

      • paddythepig

        Did I touch a nerve there Tony?

      • Well Spoken Tony

        I am complementing everyone on the site .

      • Colin

        Tony,

        If you are in the pub, you are supporting the gombeen industry. The landlord is taking the piss, charging you €4.50 for a pint of poor quality beer, and you drink it on his terms, and he tells you when to go away. ‘The customer is always wrong’ is the mantra in this gombeen industry, and they are proud to admit to saying it.
        Better go to the supermarket and buy three premium beers for €4.50 and enjoying them at home or with friends in their home.

        • whatamess

          and where you can have a smoke , indoors!

          what a sham!

        • Ryu Hayabusa

          Lidl got 20 bouteilles of Miller for 18yoyo’s..

          Dunnes had ‘em for 17 last week..

          Sure where would you be going, you can verify the quality yourself. Not like looking at a cloudy, sputum stained pub glass, where the pipes probably haven’t been flushed since Euro ’88 and there’s a mini ecosystem of assorted microbes doing the breaststroke in the fizzy carbon dioxide vortex!

          Makes you want to rush out to ‘Da Local’ and sink a cool one, doesn’t it??

          • DB4545

            A gentleman by the name of Vince Power of Mean Fiddler fame thought it would be a good idea to set up in Ireland and offer a fair deal to Irish punters, alcohol at a sensible price, after all that’s how he made his money in London. I’m lead to believe he was quietly told to f**k off back across the water there was no room for that sort of nonsense in Ireland. Last time I checked one of my local publicans was knocking out bottles of 330ml bottles of heineken for €4.50 a pop. The label told me he was picking it for 80 pence sterling max. Competition Authority investigations into the Pub Trade? Hell will freeze over first.

        • Ryu Hayabusa

          Speaking of gombeenism, Septic Phil’s bro downs Fifteen pintos, heads out for a spin, nearly punches the passenger’s ticket.

          Then comes out with the ol’ “Do you know who I am..” chestnut.

        • Ryu Hayabusa

          Similar to couple of years or so back.
          West Cork FG geriatric gombeen man.. polluted, tries to drive thru the bollards at Leinster house. He’s confronted (for his own good)

          His response.. “Do you know who I am +I’ll have you reassigned to chewing gum chiseling duty in Ballybofey in November.

          http://www.youtube.com/watch?v=_BRv9wGf5pk

          Enda’s like “Hehehe Ah sure don’t mind that ol caffler. ’tis the sauce spaking is all! The wife’ll sort him out alright. Hah? Blaggard.”

    • 5Fingers

      There were stupid Irish borrowers. But not all Irish borrowers were stupid. That type of narrative hiccup is typical of the incompetence we are witnessing with our idiot leaders and lies at the base of many of our problems and how we slept walked into this mess.

      • Colin

        ‘There were stupid Irish borrowers. But not all Irish borrowers were stupid.’ – Correct, only about 99% of them were stupid.

        • 5Fingers

          Ha ha! Very funny…

          Joking aside, Debt like wealth also has an similarly lobsided distribution where 1% own or owe 99% or damn near it. Big borrowers are the ones who own the bank. Winner takes all has its impact here as well – small numbers of people causing massive amounts of damage – not by virtue of conspiracy, but because as humans, we are 99% of us all (not just the Irish) have massive biases to those who shout the loudest and appear on Hello Mag…now if 99% of the Irish are capable of doing that sort of celebrity gathering, we are a truly remarkable.

  13. whatamess

    There is NO playbook for all this and the “kicking the can down the road” is a policy meant to buy time,find growth and make ‘orderly’ adjustments …but Ire Inc found no growth and is LOADED with debt,like no other!

    “we’ve run outa road” and Germany are fed up of giving road and are now taking it away and the end is coming very quickly

  14. Adelaide

    So, the old approach was
    ‘No bankrupt Irish bank can be allowed to fail coz that will destroy the European Banking system’

    Now, the new approach is
    ‘Some bankrupt European banks can be allowed to fail so as to save the European Banking system, although we fully expect each national government to actually save their banks through enforced bail-ins’

    Well, either way, bank failures or bank bail-ins, the reaction of the ordinary Joe is that his trust and faith in the Euro will be kaput. The Euro as a faith-based FIAT currency will be finished. Surely Draghi and co can see this or is this their intent? The old approach of ‘Save The Euro’ in now replaced by ‘Kill The Euro’.

  15. Pat Flannery

    Adelaide, Draghi is hardly trying to kill the Euro. What David is describing is a new ECB policy of forcing bank solvency problems back on national governments while denying them recourse to the ESM, which is largely dependent upon reluctant German taxpayers.

    This policy is being dictated by current political and financial realities, which seem to indicate a greater fear of the American disease of printing money known as QE than the contagion fear that drove the Irish bailout. In fact I doubt that the Irish bailout would have occurred under present perceptions. Too bad for Ireland.

    • Adelaide

      I personally know Draghi and he’s fed up to his back teeth with the Euro. “To hell with it,” he said to me the other day. “I’m washing my hands of it. Let the damn thing fail. I’m tired. I am so so tired.”

      They’re not killing it, they’ve just stopped trying to save it.

      • Pat Flannery

        Adelaide: and I personally know the Queen who casually mentioned to me the other day that if the Europeans would just put her royal face on the Euro she would be all for it as she is so so tired of the Bank of England printing press franticly pounding on her face 24/7. She has come to believe that that is actually where the name “pound” came from. She longs for the genteel, muted tranquility of Continental Europe.

        Perhaps you and I could get our two best friends together and work something out.

      • michaelcoughlan

        Jesus Christ. There is no escaping the brutal honesty in either the article or the responses.

        • whatamess

          @Pat Flannery

          do you think that Draghi is anticipating a possible DM return or at least is creating a contingency plan B and now it’s an exercise of damage limitations

          As Adelaide said “They’re not killing it, they’ve just stopped trying to save it.”

          • Ryu Hayabusa

            Hi,

            Draghi and his cohorts can probably see the writing’s on the wall, time to shore up the defences.

            There is a cataclysmic sovereign bond crash on the horizon.

          • whatamess

            @Hayabusa

            “There is a cataclysmic sovereign bond crash on the horizon”
            +1

            but nobody knows or can grasp what that’ll really look like and what real impact it’ll have and the folks who think that it can’t get much worse,have a ‘fright’ coming their way ,of GARGANTUAN proportions

            An impact event that’ll annihilate us

          • whatamess

            The City of London is expanding it’s never-ending portfolio

            “Earlier this month the Chancellor, George Osborne, announced a deal with China to make London a leading centre for the growing trade in renminbi-denominated assets and to make it easier for Chinese banks to set up investment banking operations.”

            http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10410467/Britain-to-become-first-non-Muslim-country-to-launch-sharia-bond.html

            Chinese banks on the red carpet !!

          • Ryu Hayabusa

            All hands, FG and Labour have invaded the main bridge!!!

            Crew to utmost readiness, Phasers on maximum setting.

            http://www.youtube.com/watch?v=FCARADb9asE

            Those bastards are not gonna take our ship! :O

          • Ryu Hayabusa

            It’s no real surprise.

            Osborne would auction off his Granny for a copy of The Beano & half a packet of Lemon sherbits.

          • michaelcoughlan

            Hi Ryu Hayabusa,

            My own personal favourite;

            Gsucking across the universe,
            On the starship Gsucks,
            Under captin Jerk,
            Gsucking across the universe,
            Things aren’t getting better,
            Things are getting worse!

            (worse being better for Gsucks; more profits from short sales plus hoovering up distress assets)

            Michael.

  16. Kanye West Monetary Policy

    If you follow his rhythm and you believe you are a fan of his ‘you are not a fan of me’ he says , ‘you are a fan of yourself ‘, ‘ I am just the expresso .I’m just the shot in the morning’.

    Maybe we should arrange Noonan to change his own ways meet Kanye and and be schooled in something more shocking than his own underwear and debunk the cult doctrine of Draghi .

  17. Paul Divers

    â€

    A big issue after upgrading WordPress installations is the matter of apostrophes appearing as ‘â€TM’ – junk characters.

    Stop junk characters.
    http://luisrocks.com/blog/2011/stop-junk-characters-aetm-from-appearing-instead-of-an-apostrophe/

    • whatamess

      Paul,

      Can’t you just take remote access and make these changes in a day for David McWilliams ?

      What you say David ?

      and sort out the reply boxes too and ALL the others from before on the ‘snag list’ coz it’s “only a shmall ting that’ll dirty a white shtockin’ !”

      • Paul Divers

        A lot could be done in a day.

        Quality Assurance and Accessibility results for this site:

        7 Parsing, 23 HTML, 22 WCAG 2.0 A, 1 WCAG 2.0 AA, 3 Link.
        Plus an astonishing 281 CSS Errors!

        Quite frankly someone has questions to answer.

        Sites are required by law to pass all WGAG 2.0 AA checkpoints.
        There is one error at AA and 22 at level A. This means the site does not meet basic levels of accessibility to many users with disabilities. It’s badly structured and until these errors are fixed there is no way to predict how the site will perform across different browsers and platforms.

        The site passes the zoom test but fails the keyboard test. By using the TAB key to navigate the site there is no focus and you can’t tell which is the currently selected item. This is bad for partially sighted users, blind users who are using screen reading software and also non disabled users.

        If anyone is ever paying for a web site make sure you tell your web developer you expect the highest quality possible. If he/she tells you it will cost extra then find someone else. Too many ‘web developers’ are getting away with murder and they are not proper web developers.

      • Paul Divers

        I meant to thanks you for the vote of confidence. Thanks.

        • Paul Divers

          Awful spelling. Finger trouble. Must get a better keyboard.

        • whatamess

          you are clearly “into it” and that’s the difference it makes

          ive OFTEN logged on to this site and get errors
          ang junk characters ,as an example, don’t reflect well on David’s professionalism,which is not in question!

          i know enough about the intricacies of web design to know i know nothing at all.It’s ALL those little differences that collectively make ALL the difference to the experience!

          You could always liase with DMW’s designer,if noses are going to be put out of joint ???

          Our host will decide

      • Paul Divers

        Blogs are not web sites and they are unique because they have quirks. They have a home made look and feel and that is attractive as long as the content is first class

        However for someone who is a professional the bar has to be raised to the hilt. Everything has to be perfect in the quality department and if not it makes visitors wonder

        Even good sites like the one below has errors. The trick to become standard and valid and stay there. Keep the eye on the ball and test from time to time especially if there are other content editors who need guidelines to follow when posting content.

        Load this page and start tabbing. Note how the currently selected item is clearly highlighted.

        15% of the population is disabled and this figure combined with the grey generation represents around €1 Trillion annual economic opportunity in the Eurozone

        There is tons of work out there for someone like yourself who realises that web design has nothing at all to do with Adobe Photoshop.

        http://www.universaldesign.ie/

  18. EMMETTOR

    Bailing out the banking system was an insane idea, never gonna work. EMU was a botched job, who’s fault was that? The price for the bail-out is, firstly, Ireland, we are dead in the water, I’m getting out. Secondly, the Euro is doomed, we could’ve held a gun to it’s head when it was actually worth saving, another boat missed. Finally, the EU, bureaucracy triumphant over democracy and the EU Civil Serpents botched, botched and botched again, as Civil Serpents do. David articulates what has been clear to me from the start. This is bad and it’s gonna get worse and all those truckloads of real money, being used to replace debt, gone forever, wasted. You simply cannot say “this is Capitalism” and then ignore the absolutely basic rules of that system. Corporate Welfare Kills Economies.

  19. What was Foisted On Capitalism By Irish Govt And Others Was Akin To Removing The Crankshaft From An Engine And Expecting It To Run Smoothly, total agreement EMMETTOR,

  20. 5Fingers

    Bailing out the banking system is exactly what an immature share speculator does when they refuse to believe it is time to cut your losses. The only trouble is that when immature speculators get burned, might loose a few 100K or the house because of greed and the idiot belief that if you just dump now, you’ll be sorry the next day you never waited. That’s why DMW says the market has no memory. Memory has no guaranteed upside.

    The longer we wait, the bigger the bust. There is no upside at all and the resulting splash will big. In winner take all scenarios, you create one point of failure. Single points of failure need to be defended by dictat and with paranoid mindless following. It becomes the focus and the excuse for doing nothing or changing nothing. Behold the thrall! Sorry to be biblical

    I blame Hello Magazine, Celebrity Reality TV, CNN, RTE, BBC you name it. Useless sources of information blinding us all to what is really possible.

  21. Paul Divers

    A chairde

    It’s nice to take time off from this site and return with fresh perspectives. Some sites affect you and not always in a positive way. It’s wise to take control from time to time and go with the heart. Have an ollerday

    Currently I doing an internship with a County Council and it is going great. I am loving it deep in the heart of darkness that is the post celtic tiger Irish midlands.

    I love the characters I meet and today I went for a scalping and tomorrow I am going back to look at the barbers laptop during the lunch break. Pennies from heaven awaiting if I can fix it for the man. He is a great character and the main street he works is full of life

    It has changed my outlook and I am happy and up like a lark in the mornings. I like Ireland. I really do and have no intention of leaving and fucking off to a shitehole like London and I am well able to brush off any birdshit that lands on my shoulder doon the cooncil

    I think I can make it here. It is either aged wisdom or a knowledge of technology that makes me feel secure not want to leave. I feel I invested my time wisely and that things will happen for me here. It’s taken savage work mind you

    I smile when I am taking a ten o’clock roll up watching the barges on the sunlit shannon wondering what you lot are doing and thinking. I wonder what continent you are on and then stop wondering

    It’s the usual stuff – changing toner cartridges and replacing sweaky mice. The guys are civil and women are shy. Just ordinary life in a small Irish town which is like a dream state during lunchtime walks to the chipper or the bakery. Innocent life

    Sometimes I might have to strip and rebuild PCs and I enjoy that type of work. It’s basic stuff and the thought of doing not much all day for 9 months was of concern to me so I took half the time off during the first fortnight and got my managers attention.

    I had trouble adjusting and my sleeping patterns were all to pot but I had an ulterior motive

    It looked like I was acting the bollox and I don’t blame anyone for thinking I was because in truth that is the way it looked but the reason I could not sleep was because of the opporunities I see in front me.

    They are panicing about Windows XP reaching end of life in April. I am an Open Source guy and they think OS is a toy for guys who like to fuck around with computers at home in the evenings. Really

    I did a serious evaluation of the Council’s web site and after comparing it with others saw massive room for improvement focussing on quality, usability and accessibility and advised my line manager that if we work on accessibility we could make a real difference that would be of benefit to everyone in the county.

    If we were to win something it would boost the careers of anyone who wanted get involed and who cared enough to go above the call of duty to address the needs of elderly and disabled people thoughout the county. I am thinking about this all the time I am awake and want to do something great. Like Jock Stein I dream big

    Only 15% of public sector websites meet the WCAG 2 AA standard and I have 9 months to work on this stuff and put myself in a great position. In fact I can’t quite believe the position I find myself in in this country some of you seem to hate. I think some of you are spoiled.

    In another post whatamess was talking web stuff and he has cop on. Yet I am prepared to offer services free to causes and people who need and deserve it. You are not getting good service here and it is well documented

    Do you know how much a professional evaluation costs? About 4 grand with six hours testing with four of five representative users.

    I found there are national awards for eGovernment in the UK and Ireland and homed in on the best websites. Currently our county is around 15th place and that is not good enough as far as I am concerned. I know why and what to do about it

    One of the awards was sponsored by Google and had nowt to do with quality. It was all about how ewach site performed on Google

    I would not want to enter such a competition and would rather focus on helping blind people or those those who can’t use a mouse.

    I found my destiny and know what I will be doing as long as god spares me. Fuck knows my own eyesight is failing badly and I have to keep zooming on half the sites I visit

    My manager listened and loved my ideas and each time he sends out emails he starts with the A Chairde craic. Im not sure what it means and wondered if some of my friends here could put me straight. And why do people never say A Chairde on this site?

    It is that a west brit thingy?

    You Plucky Boys of the Sod.

    mise le meas

  22. Paul Divers

    Hmm yes it’s all clicking into place now.
    I reckon this is what is known as a west brit shop.
    Am I right?

  23. Ryu Hayabusa

    I’m brushing up on my German. I hear John “Bowsie” Bowe is giving lessons.

    Collective clearing of throats… .. .

    “Deutschland Deutschland uber alles..”

  24. DB4545

    I think Auferstanden aus Ruinen might be a better choice. It’s a nice tune and I hope Rising from the Ruins will be one of our ambitions. It’s the old East German national anthem.

  25. Ryu Hayabusa

    Deutschland, Ich liebe dich! Laut Singen.

    http://www.youtube.com/watch?v=mZ8zUcg_Lks

    It’s actually got a grand air.. if you can park the history baggage bit!

  26. [...] David McWilliams explains what’s coming up for us in an excellent article here. [...]

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