May 1, 2014

State's role in Banana Republic chapter is what's really worrying

Posted in Banks · 60 comments ·
Share 

In my 2007 book ‘The Generation Game’, I wrote “Anglo Irish bank is little more than an out-of-control hedge fund leveraging themselves and their clients into property”. The lawyers for the publishers insisted that the name Anglo be dropped, for fear of litigation. So the published sentence replaced the words Anglo Irish Bank with the more general “certain well-known Dublin banks”.

And it wasn’t just me; many others had concluded this about the Irish banking system, yet the authorities did nothing.

Looking at the Anglo trial, one thing that really stands out was the complicity and the knowledge of the State in this illegal act. It has been truly breathtaking to see that the main financial institutions of the State – the Central Bank, the Financial Regulator and the Department of Finance – were all aware that Anglo was lending money to people in order to ramp up its share price artificially, but did nothing. Yet they were happy to continue to describe the banks as “well capitalised” right up to the end.

This is remarkable.

This is real Banana Republic stuff: the State knows something is illegal but rather than face it, it looks the other way. This type of behaviour goes to the root of the Irish banking crisis and, although there have been some changes at the top, the question is whether it could happen again?

The favoured narrative is that Anglo was uniquely delinquent. It may have been uniquely criminal, and that remains to be seen, but it is not the case that it went about its daily business much differently to any other institution. Remember, every single Irish bank was bailed out by the Government in 2008. Read this again. We are talking here about systemic and institutional failure on a monumental scale.

And the banks did not go bust overnight. They went bust, to paraphrase Ernest Hemingway, in two ways: first slowly, then quickly.

The economist, John Mills, said the following of crashes: “The crash doesn’t destroy wealth, it merely reflects the extent to which wealth has already been destroyed by bad investments made in the boom.”

Wealth here was not destroyed by the crash but by stupid decisions made in the boom, driven by the effervescence of the herd and fuelled by reckless lending. The banks went bust initially slowly. Every time some madcap dream of a developer was financed, ordinary depositors’ deposits were put at risk. When those loans went bad, the bank had to find the money to make up the shortfall. This is what the regulator is paid to spot – years before it gets out of hand. The financial authorities were not up to the job. Regulators are paid to spot the slow bit of the process, which prevents the fast bit of the bust.

Banks should be afraid of the regulator. If they are not, banks have an almost inbuilt tendency to lend too much during a boom, pushing up share prices. Share prices rise with profitability but, the more profitable a bank is in a boom, the more risk it is taking.

Rather than celebrate bank profits, a regulator should feel queasy, call the bank in and impose limits on lending. But it seemed that in Ireland, the regulator was happy to just watch from the sidelines and cheer on bank profits, continuing until the very end to say that the banks were “well capitalised” when, in fact, the opposite was the case.

From 2003 on, the rapid expansion of property lending was largely financed with loans from international investors. From less than €15bn in 2003, international borrowings of the six main Irish banks rose to almost €100bn (a lot more than half of GDP) by 2007.

There is a tendency to blame Anglo for everything as if in some way it was acting alone. This was not the case. They were all at it.

To put the banks’ borrowings in context, AIB and Bank of Ireland (BoI) doubled their total loan books in three years. BoI took more than a century to build a loan book of €63bn and then, in three years, from 2003 to 2006, it doubled it.

The slow bust was the reckless lending and the reckless borrowing to finance that lending, which began in 2000 and went into overdrive in 2003/4, culminating in the crash of 2007/8.

The reason banks have to be watched so closely is that their assets are long term, but their liabilities are short term. This means they can get caught out easily and actually run out of money quite easily, too.

Take an ‘asset’ such as a mortgage. It has a 30-year lifespan, so it is very long term. However, the liability the bank has to correspond with this asset could be a retail deposit.

It, or a corporate deposit, could be called in overnight or maybe at most in one year. Interbank deposits are another significant component and these are typically less than a year in maturity for the most part and normally less than three months.

This means that banks can run out of money easily because their capital is only the difference between their assets and their liabilities. If the price of their assets is falling and their liabilities are being called in, they run out of money.

This is why banks first go bust slowly and then very quickly.

When our banks went bust, the Government had to act because AIB was on the brink of bankruptcy and this risked all the deposits in AIB being lost in the inevitable bank run.

Some argue now that the bank guarantee is the root of the Irish banking crisis. However, this cannot be true because the guarantee was the reaction to banks being bust. Had they not been bust there would have been no need to do anything.

The guarantee was the consequence of the Irish banking crisis, not the cause.

The crisis stared in 2000, not 2008. In fact, by 2008 it was all over.

By then, the Government had to act to protect deposits. It could not do this by merging bad banks with good ones because there were no good banks in the country. Every single bank in Ireland needed a bailout. They all needed help.

The State could have nationalised the banks there and then – but that would not have protected taxpayers. The Government could have let them go bust. The State could have let go of toxic banks but AIB, the biggest bank in the country, was on the verge of bankruptcy. Would letting AIB go have been a good idea? How many depositors would have lost everything?

The State could have grabbed hold of the country’s deposits and borrowed heavily as it did in Cyprus to try and make up the shortfall. Would that have worked?

There is a narrative in Ireland that blames the guarantee for everything, as if there was some other easy, painless option. There wasn’t. We didn’t even have a bank resolution mechanism in place. And – even more amazingly – we still don’t.

The bailout, troika and guarantee were all the consequences of the years of reckless lending and pathetic regulation that went before. All the banks were complicit.

What we saw at the recent Anglo trial was that even at the eleventh hour, the Financial Regulator, Central Bank and Department of Finance bosses were all prepared to look the other way.

David McWilliams writes daily on international economics and finance at www.globalmacro360.com

Subscribe to receive my news and articles direct to your inbox


    • For the record the central back was not a “financial institutions of the State” See central bank act 1942, private banks are the joint stock holders of the central bank. David know this well and this is another example of his misinformation campaign.

      Also see Bank Of England on money creation and the simple youtube clips. http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

      Davd is still frighten to go there….

      • Grey Fox

        Spot on…. but there was opposition to the setting up of the Central Bank all those years ago…just not enough.
        “Mr. Dillon: Is it not astonishing that the Taoiseach does not want to have that question out again? He comes here and says that he must offer the people who will subscribe to his loans an inducement in the form of substantial interest or he cannot expect them to lend him their savings which can be otherwise profitably employed. That is a defence of usury which I find distinctly stimulating to hear in a professedly Christian State. Leaving that aspect aside, this matter goes to the very root of the question. When the Taoiseach receives subscriptions to a national loan from a bank, my submission is that it is not the depositors’ money they lend at all. They lend money which they themselves create. On that they are paid probably what the Taoiseach believes is an equitable rate of interest in order to induce people to create savings. They are not savings at all. The banks are simply making an entry in their books. The Taoiseach says that in order to induce them to make that entry he must give them that satisfactory rate of interest.”

        Link to this document here: http://www.oireachtas-debates.gov.ie/D/0087/D.0087.194205260022.html

      • http://historical-debates.oireachtas.ie/D/0088/D.0088.194207170014.html
        I want to ask this House why Oireachtas Eireann, in the Central Bank Bill, adopts as its own the doctrine that there is some holy right in the joint stock banks of this country to demand from the people and the Government payment for the use of credit money which exists only in their imagination?

  1. SMOKEY

    And who needs a “banking enquiry”? Didn’t we just get all we needed to know, that which we knew already, that those in charge will not be held accountable in any meaningful way?
    A prison toilet with a big mean dude watching while you have a crap and threatens to give it to you up the arse would focus the mind.
    But maybe they will do “community service” in the form of visiting schools and giving them some math lessons instead.
    Im going to make myself an omelette now with diced green and red peppers and onion and a bit of diced rasher and cheese.

    • Adelaide

      Smokey, how can one arm of the state (the law) prosecute the bankers when another arm of the state (the regulators) was complicit and cheerleading the very act before the courts? Hence the light sentence.
      Otherwise it’s a repeat of that classic Casablanca scene.
      https://www.youtube.com/watch?v=SjbPi00k_ME

      Captain Renault: This café is closed until further notice.
      Rick: How can you close me up? On what grounds?
      Captain Renault: I’m shocked, shocked to find that gambling is going on in here!
      Croupier:[hands Renault money] Your winnings, sir.
      Captain Renault: Oh, thank you very much.

    • MjHi

      Well it says a lot about Ireland if you any way advocate the rape of anyone in Ireland in a prison. Maybe we get what we deserve because we dont do justice only revenge. I think that these men should face more serious consequences but not rape or even the threat of it.

      • SMOKEY

        One of the the scary things about prison is getting your hole stretched.
        My point was, and you missed it, that this fear of a stretching by an inmate who could have his way with you because he wants you to “toss his salad” is that it was never on the cards for these guys.
        Being fearful of dropping the soap in the prison shower room was not something they were ever worried about because the judge had no intention of giving them hard time. Or even giving them a hard time, the instruction to the jury was almost punitive to the jurors.
        My point is that sometimes in prison, pushing a friends stool in, or browning the sausage, is a serious way to make you think about not doing something illegal.
        I don’t do crime for fear of the getting my mud busted by some thug who would enjoy making me his punk.
        That was my point. Prison is not fun, rim jobs and up the Hershey highway by force is not my idea of freedom.

        • Tyler

          classy guy !

          it’s Fri nite…

          im not gonna let you annoy me

          • SMOKEY

            Tyler, m’kay, if you think getting your fudge packed m’kay, is classy, or having a turd burglar knocking at your back door m’kay, if you think that’s classy…. you are a sick puppy,..m’kay?

  2. Brian Ború

    Was he a Loan Shark ? Did he ask you ‘ how much do you want to Ború ?

    Would he be celebrated were he alive today ?

    Did a negative equity borrower kill him ?

    How was he killed after all he had the best armour for protection ? Will the Bank Enquiry find this out ?

  3. Colum McCaffery

    Second only to “a culture of”, “the state” is the most popular form of evasion around. The problem is decisions made by individuals. Where it was policy, the policy was decided by a group of individuals. Not only have we a retired regulator who didn’t do his job paid an eye-watering pension, but most of those who failed are still in place. http://colummccaffery.wordpress.com/2013/05/12/they-are-known-to-be-useless-and-they-are-all-still-there-a-reminder-from-eddie-hobbs/

  4. Pension Moratorium

    Electorates should DECIDE to cap all State Pensions to (say) €50,000 ( incl aggregates)

  5. Bamboo

    David, you’re still not naming the names of the bank regulators of that time and other dignitaries. Is someone stopping you again from calling names?

  6. Hi Bamboo, nothing at all stopping me. There are just so many of them! D

    • CorkRob

      Name & Shame !!!!

    • michaelcoughlan

      Hi David,

      Any chance the people on the regulators board at the time were connected to an as%hole who lives in Drumcondra?

      Fitzy et al should have been charged with reckless trading:

      http://www.irishstatutebook.ie/1990/en/act/pub/0033/sec0138.html

      Fitzy, Whelan were not guilty of most of the charges preferred and even the dogs in the street knew it. They were charged under section 60 of the company’s act 1963. It states the company is not allowed to issue loans to buy its own shares. That’s to prevent corrupt management from over inflating its own share price artificially. That’s a much different scenario to the one faced by Fitzy when that head the ball Quinn had a 3bn Spread bet on Anglo shares long which went against him when Lehman’s failed.

      Fitzy new that when Quinn unwound the position the knock on effect was to kill the share price so he acted to stabilise the situation rather than unjustly enrich the 10 maple people.
      This is a whitewash.

      Fitzy should have been charged with reckless banking. The regulator wasn’t allowed to stop him because Anglo wouldn’t have been allowed to expand at the rate he did if the regulator was doing his job properly. And why wasn’t the regulator allowed to do his job? Because the Drumcondra Mafia was cleaning up on votes during the artificial boom.

      This trial was nothing more than a kangaroo court to assuage an angry and embittered public and deflect attention away from the real failures of corporate governance, regulation and political leadership in Eiruba.

      And now they want an enquiry? The enquiry should ask only one question; why wasn’t Fitzy charged with reckless trading?

      And we all know the answer and don’t need to spend a fortune finding out; The Druncondra mafia were cleaning up vote wise during the artificial boom.

      Just like in snake and ladders where we all go back to start again when landing on a snake all the snakes went home to Drumcondra and all the people in Eireuba have to start again.

      • Grey Fox

        Without sounding smart of cheeky Michael & no disrespect intended, what Law covers Reckless Banking?

          • Grey Fox

            Very Good, the application of the correct/proper law will garner the required result, all that is missing is the will to succeed.
            Off Topic…
            The same applies to Water Charges, I do not object in principle to Water Charges unless they are misappropriated which I believe to be the case with Irish Water, with that in mind I have had my Water professionally tested in a Laboratory with startling results, on that basis I will challenge the first attempt to extract money from me utilising the 1980 Sale of Goods Act, most people are not aware that is legislation applies and the goods / service is not fit for purpose. Most people do not also realise that Water Charges are not a tax but a Charge for Goods and or Services.
            Again the proper application of the correct Law will get the desired result.

        • Problem is Grey Fox, EVERYTHING in this so-called country is misappropriated.

          If I lived in Norway or Sweden or somewhere that’s actually civilized, I would know that an income tax rate of 60% was being used to provide proper services, healthcare, education. In that case I wouldn’t mind paying taxes.

          Welcome to the Rip-Off Republic.

      • EMMETTOR

        We could outlaw contracts for difference or at least make them into a market. As far as I know, all that stuff is still across-the-counter and that’s means share prices are a fiction.

  7. It doesn’t just go to the root of the Irish banking crisis David. It goes to the root of Irish culture and mentality – or lack thereof.

  8. Grey Fox

    Once again David you have approached the line but you failed to cross it, you speak about depositors money and yet you mention nothing about Securitisation, the very tool which took all…ALL of the risk out of lending for the Banks, remember, in their own documentation, a loan which there had been one single monthly repayment made for qualified for Securitisation and this was on loans which were also qualified as 100 – 110% LTV and based on qualifying criteria which allowed multiples of annual salaries of 6 and 7 times.
    Every single rule in the book was broken by all the Banks both voluntary and compulsory, (although there is very little if no Banking Law per se in Ireland)..WHERE ARE THE SANCTIONS?
    You are correct in saying they went bust slowly and then the Anglo chapter accelerated the crisis, in fact Feb 15th 2008 was the real turning point.
    http://awakenlongford.wordpress.com/2014/04/23/sept-2008-no-the-real-bailout-was-15th-february-2008/
    Yet this date is largely ignored, “just the Banks doing business”, this is when every Bank in Europe and every Regulator in Europe knew that Irish Banks were screwed!
    Good article David but I would have liked to see you include the effects of Securitisation….

    • EMMETTOR

      As always, in Ireland when it’s time to pass a few laws about banking, we’ll get back to you about that. Now, the legislation to enable Water Charges, Passed!

  9. Bankster

    David, this is no surprise to any of us. Imagine if you are a European or a British citizen looking at Ireland and saying “this state was founded in 1921 and in less than 100 years, the Irish have ran the place into the ground”. They are incapable of managing anything on their own”. We have proven that we have an a la carte state and choose to see or not see what we wish, a very insular island mentality. There are none so blind as those who do not want to see. The word that springs to my mind now is Dystopia. Ireland will never ever change. Bob Geldof was truly correct in describing Ireland as a Banana Republic.

    • Dude, Geldof can’t even look after his own kids, never mind preach to the rest of us.

      He’s right though, it is a Banana Republic. I’ve lived in an ACTUAL Banana Republic (it was the main export) and it was run better than here.

      • The Real Banana Republic ( Dublin ) – exports Monkeys – who failed to vote in politics those that really matter to govern and those that are left behind – are Apes – who just look like monkeys and act like monkeys who make more monkeys and talk in circuses every day .

  10. paddythepig

    “The guarantee was the consequence of the Irish banking crisis, not the cause. The crisis stared in 2000, not 2008. In fact, by 2008 it was all over.”

    Unfortunate fact of life. No matter how many times you repeat this, most people still won’t grasp this.

    In 2008, there should have been a raid on deposits and bonds in equal measure, that would have been fair. It should have been on a per-bank basis, and not aggregated across banks. In other words, depositors and bondholders in Anglo and AIB should have been hit for losses in Anglo and AIB. There would be no promissory notes, no taxpayer recapitalisation of banks.

    • paulpr

      How exactly is a raid on deposits fair?

      • paddythepig

        The shortfall has to come from somewhere. As it stands, it comes from Irish government taxation, so the losses are spread out to the population as a whole, rather than the individual depositors. Is that fair?

        Bonds are essentially foreign money – peoples pensions and deposits from other countries. Would raiding that money, without impacting local deposits, be fair?

        Casting bondholders as ‘speculators’ is just a caricature ; depositors are speculators too.

  11. pauloriain

    So those who had money in the banks would have lost their money, but now everyone in the country, whether they had money or not pays and worse still people born after the fact will also be paying for this… is that right?

    What’s ironic is those who had deposits in the banks are now out bidding up the price of houses, because they didn’t lose their money and now families are being priced out of the market once again. There’s no sense to this, it’s not right.

  12. tim1234

    The fact that the 6 mains banks’ international borrowings grew to be six times more in 4 years, shows not only how wreckless the banks were, but also how little the general public seemed to know what was going on. Generally speaking, we as a nation put so much blind faith in the banks, regulator and government and thought that they knew what they were doing. There was probably also the assumption that once we entered the euro, everything would be more financially stable for us all. I found out for my first wordpress blog that in Ireland, per capita, we built 6.7 more homes than in the UK in 2006(Our rate of population increase during the boom years wasn’t even 3 times the UK’s in the same period)
    While bank lending figures increasing so much might have gone over the general public’s heads, seeing the physical evidence around us of homes being built around us in the middle of nowhere should have caused us to question things more. I believe in the saying that in politics that you get what you deserve. I think it’s convenient for us to blame Ahern and Cowen (especially since Cowen became finance minister just when things really started to get out of hand) but they were in some ways just representations of the general public’s psyche and attitude. (I know alot of people would like to disagree) I think it’s ironic (if that’s the word that I’m looking for) that Padraig Flynn’s infamous interview on the late late show was exactly 10 years before Anglo Irish was nationalised. If we got what we deserved, we now want much better.

    • Tyler

      @Tim

      You are of course perfectly right when you said that we placed “so much blind faith in the banks,regulator and government and thought that they knew what they were doing.”

      We trusted them,as we Irish are by their very nature a trusting people.My fear sometimes is that this banking fiasco /tragedy ,may result in our trusting nature being stripped from us and for us to then possibly pass this gene of distrust and mistrust to the next generation??

      The mistrust gene can cross-contaminate and while distrust in elite banksters and oligarchy is highly recommended,trust is a very special and unique Value of the Irish and it’s ok and actually very important in expressing one’s humanity to trust,right? – Trust in our personal relationships, friendships, professional dealings etc…not everyone is a slime bankster looking to rip us off ….

      “In politics you get what you deserve”

      hmmmm

      While i agree with the sentiment of the real world consequences of democracy – “the [sometimes]tender mercies of injustice” – i’m not at all a fan of the word “deserve” and while i’m perfectly aware that it’s not English class Tim ;) and i’m certainly not critiquing your interesting post,but i feel strongly that we must all help to dispel this Irish Catholic guilt from our psyche and from our culture and from our genes and the use of words like “deserve”,can trigger and feed our uniquely conditioned emotional hard-wiring of Irish shame ,heaped on top of debilitating guilt ! oh how i truly despise such words!

      Indoctrinated guilt and shame only suffocates the soul without you even knowing it,poisoning you from within.I just feel we must be very mindful and careful with a few words e.g.- “deserve”,”should”(a widely abused parent word),”shame/ashamed”
      are all on my personal goal list for eradication anyway!

      Tim,you say “I think it’s convenient for us to blame Ahern and Cowen (especially since Cowen became finance minister just when things really started to get out of hand) but they were in some ways just representations of the general public’s psyche and attitude. (I know alot of people would like to disagree)”

      “Convenient for us to blame” – yes,i would like to disagree with you too ;)

      If Cowen wasn’t up to the job Tim,he had a responsibility to the nation,to be True to himself and True to his colleagues ,True to the electorate,that he simply was not able,step down and leave a more well equipped person do battle!

      Yes it’s hard not to get stung by a nest of banking vipers,but that’s what he signed up for !!

      Good intentions,go to hell !!

      Nice man, great father, great friend, great son, great husband- i care not !!

      Not at that level. Stakes are too high !

      [When joining a new poker table,if you can't figure out who the sucker is in the first 5 mins,you are the sucker!!]

      you continue ..”but they were in some ways just representations of the general public’s psyche and attitude”

      maybe in your mind,but in my mine,these were guys wanted the roles of LEADERSHIP,claimed they had the overall skill sets [inc negotiating skills],and were ENTRUSTED to protect the citizens and we sold us down the river!!

      [ and yes Cowen, Ahern, Lenihan were bullied,outflanked,out-smarted,out-manoeuvred by doomsday scenarios and took the wrong advice from the enemy within the gates,in what was a highly volatile & stressful set of unique circumstances,but again,all that being said,the Irish people placed their trust in and relied on ,our leaders to be up to the fucking job,to be Honest and have the citizens' welfare as their focus and selling us into debt slavery, ought to have been a line in the sand that they would not,could not [considering our unique history],ever cross!!!

      this figure in this link is only going one way !

      http://www.financedublin.com/debtclock.php

      In the Paulo Coelho’s,”The Alchemist”, Santiago the shepherd often referred to his “Personal Legends” – his dreams of what could be…

      How with such a debt load can Ireland ever grow?

      • Tyler

        As we are talking bank regulation,and hear me out

        this is exactly why Glass Steagall is so important to Ireland!!

        Even with the piseogarí of significant growth in our eceonomy,our debt load is simply too great for escape velocity. Fact!

        Bonbon refers to it as “the 10ton flea on the 1 lb dog”

        By splitting Wall St and smashing the TBTF TBTB status [becoming almost a bizarre and worrying tradition]a precedent is set for a global Glass Steagall.With a level playing field established Stateside,a message to all the world’s nations of “come together in unison and trumpet ” no we will not be debt slaves to bankrupt TBTB TBTF TBTM banking oligarchs and We hereby write off this illegitimate debt” and then with a plan and a tiny fraction of the derivative mountain,we can wilfully choose another path,sans empire and it’s beastial monetarist mission

        Repudiate the illegitimate debt (by whatever lawful mechanisms )or else,under current conditions,there will only be continued austerity,decay,entropy,misery,FEAR and despair for the serfs!

        We can choose to be Free!

        “It is in our hands. We will not let it go.”
        (VI Vernadsky)

        Glass Steagall 2014

        dump serfdom

  13. Pat Flannery

    Yesterday, April 30, 2014, the U.S. Federal Reserve announced the following:

    “Beginning in May, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $20 billion per month rather than $25 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $25 billion per month rather than $30 billion per month,”

    In other words the Fed is still feeding the mortgage-backed securitization monster, at a pace of $20 billion per month.

    Grey Fox is right. For David to write about the Irish banking crisis without even mentioning mortgage securitization proves once again that he is guilty of distortion at the very least.

    Why does he persist in the lie that all Irish banks’ liabilities were in the form of retail deposits, corporate deposits and interbank deposits? Why does he completely ignore the real source of Irish banks’ liabilities: mortgage-backed securities contracts? Why does he not even mention them? Could it be that he was told not to?

    I can’t believe he is ignorant of the existence and centrality of these contracts. What that makes him, I don’t know.

  14. HenryJames

    In relation to the state‘s perceived incompetence and the unbelievable sequence of events clearly highlighting the broken nature and bankruptcy of the state and its agents…
    If we look around at the other nation-states we may well be prompted to ask; well, by which state or set of values ought we measure ourselves against or refer to as we aspire towards…greatness? Or perhaps at least, towards functionality? Who’ll be our role-models now that our role-models are gone?

    It then becomes slowly and not a little ominously clear that these self-same “problems” are widespread on a global scale-why, it must be inherent in the human condition that with any organisation(s) we are unable to operate or devise one which is functional, fair and growthful.

    This is until we make a small sideways step removing ourselves from the mainstream mania and admit to our awareness that the system is in fact flawless-a work of genius and all is going just exactly as is to be expected. It is organised down to a tenth of a percentage point.

    Incidentally there is an organisation that has, does and could operate as functional, fair and growthful all things being equal. It’s known as a ‘family’, however, all things are not equal.

  15. Tyler

    @DMW

    “Some argue now that the bank guarantee is the root of the Irish banking crisis.”

    And ‘some’,it can be argued,are perfectly correct in this assertion.

    “The bank guarantee was [indeed] the root of the Irish banking crisis.”

    Gan dabht David !

    Not that anyone here needs reminding,but the then already corrupt and frenzied banking system/environment in Ireland pre ’08,was further contaminated by:

    (i) an unfeared,unthreatening,blinkered or blind – Pat,”it’s a complete blank” Neary – who didn’t even know where the regulatory brake pedal was,and/or at a loss as to it’s functionality,or just plain didn’t give a sh*t either way !

    (ii)Our(and keeping it Real now ok)inept,inexperienced,incompetent, likely ‘corrupt’(in many senses of the word) politicians were busy fools genuflecting to the gambling banksters

    (iii)ALL financial institutions of the State were competing with a survival-of-the-fittest mindsets,rivalled only by the gladiators at the Colosseum!

    All politicians of the day,in their actions,inactions,words and deeds, were complicit – knowingly or otherwise – with empire’s Grand plan

    i.e. Decades of future debt servitude for the Irish … no wriggle room there in my mind now.We were sold a manged pup,or rather,we were FORCED to buy a manged rabid pub!

    With all that said,are the Irish citizens being asked to seriously believe,for even a deluded moment,that senior gamblers,on a notorious gambling spree,didn’t FULLY anticipate where the trajectory of wreckless lending policies was taking them and would invariably take them,[both as individual cogs and collectively as our banking system] that is – sailing into a future zone of high uncertainty /high risk and at worst,possible insolvency,rapid unwind and subsequent contagion effect.

    They knew all along,right? Be sure they did !..c’mon, even in those murky unchartered waters,they knew – every step of the fuckin’ way,they knew!People being brainwashed to ‘believe’ in anything other than this Truth ,that this was a planned heist “on a monumental scale” of the peoples’ Future and is for me “what’s really worrying!”

    • Tyler

      The British Empire set the scene with an orchestrated ‘Surf was up’ competition with quality ‘swell’ that wasn’t gonna last forever and banksters were paid big bucks to ride big waves…competition was fierce….the gamut of enthusiastic sponsors were out in force….adrenalin was pumpin’ ,but sadly, any remote sense of personal fear of a horrific risk of wipeout ,from the perspective of the gambling banksters,was noticeably absent.

      Why was that?

      Because they were sociopaths,securitisation snorting sycophants ,derivative smoking pirates,sans conscience and morals,sans any love for their country and regard for the citizens??

      Sure !

      But the Fact remains,that the shape-shifting banks,both individually and collectively,had achieved [albeit in the shadows until the Lehman tsunami and Quinn's 25% cfd's position] a status,in real world terms – both politically and economically that reeeally ‘sealed THE deal !!!!!’ –

      They had engineered a status for themselves of too-big-to-fail
      - ipso facto, untouchable !!!!

      TBTF too big to fail
      TBTB too big to bail
      TBTM too big to manage
      TBTP too big to prosecute

      • Tyler

        And we all now know that the sugar-coating ,so-called “elite” of international banking cabals [empire!] following a planned scripted strategy,knew all tooooo well,years before Lehman,that the optical backstop of our Gov’t was much more than optics and that,at the threat of reaching critical mass,the bankrupt banks’ likelihood of being rescued was a foregone conclusion!

        The systemic banking system had to be saved,”at all costs”, [for Ireland's sake - don't make me laugh!]so the contagion threat to European institutions and beyond,was ‘contained’ !!! and in the process,deviously engineered a precedent per se,that bank debt,with a sleight of hand,became sovereign debt,and oh how we obliged them!

        We were most certainly a test case – to determine our emotional elastic limit,just how far they could PUSH us and they found out,didn’t they – All things being equal and “i hold the world but as the world”…. it was generally silence,indoctrinated compliance and acquiescence,maybe not in word,but in deed.Maybe we were brainwashed that “we went mad” and we were’at fault’,to blaaaame,ought to feel guilty over and ashamed of,when that’s not the Truth – This illegitimate debt was forced on us!

        • Tyler

          C’mon we know this to be True,as will several future generations discover ,to their disgust and maybe “our sons and daughters will rise up and fight where we stood still”?Our politicians at the time of the bailout,by their action and inactions and with gross incompetence were fooled and corralled !

          Trapped ! ..they had no game plan,,no strategy,,no balls!

          Check mate!

          Our politicians,the suckers that they were, played right into the hands of empire –

          Sleepwalked us ALL into their snare !!!!!

          “Some argue now that the bank guarantee is the root of the Irish banking crisis”

          Gan dabht ar bith!

          Empire knew the end game ! They designed it afterall…

          Secure the bailout and kick the can down into the future generations!

          Are we that naive ( grossly misinformed more likely)to think at THAT level of [rigged] global finance – EMF,BIS,corrupt private central banks – that these professional IMF/Troika economic hitmen didn’t anticipate and engineer this EXACT scenario?

          P-u-l-l-e-e-e-e-s-e..

          Future planning,risk assessment,being 4 moves ahead of their opponents,is second nature to these vultures and is what tacticians /strategists are all about.

          To devour and annihilate,is their True nature!

          At the time of the blanket guarantee/bailout, Ireland desperately needed wolves to protect us from the IMF wolf pack,but sadly…

          “i was taught to fight,taught to win,i never thought i could fail”

          http://www.youtube.com/watch?v=lYnwC9yoa8g

  16. michaelcoughlan

    @Tyler.

    Your posts indicate that you have intelligence a high level of education, insight and depth of personality etc. Much of what you say is a rehash though, of other people’s opinions or the dogma you are listening to from your buddies.

    Let me offer some well intention advice and don’t respond that I am engaging in an ad homenim attack because that’s not my intention. When you say dump serfdom find yourself the courage to demonstrate leadership and free the first and most important serf of all (which of course is yourself) from the cult that captured you. You will be far more likely to be taken seriously from that point forward.

    Best regards,

    Michael.

    • StephenKenny

      I agree.
      Of course it could also be an example of lone of the things that Snowden exposed: The UK’s GCHQ’s enthusiasm for ‘muddying waters’ on internet blogs and sites – resetting Reddit counts, swamping conversations so they get lost, in fact doing anything possible to stop people learning and understanding things that would not suit their interests.
      For example, how often are there references to the current Ukrainian government getting into power from a western backed coup, or, strangely, to the abnormal number of suicides of senior financial sector staff, over recent months (it’s something like 20, so far).

      • Stephen, as far as learning and understanding goes, the Philistine bone idle riff raff could very well do it if they wanted but they can’t be arsed – it’s easier and less hassle to go along with the plot of Eastenders, so that’s what they invariably do.

    • Michael,

      Tyler is bonbon/whatamess/whateverthefuck

      Surely you realize that?

      Best to just ignore his verbal diarrhea, there’s nothing of value in it.

      Regards,

      Adam.

      • michaelcoughlan

        Hi Adam,

        Yes I understand re bonbon/whoever. The way to deal with the Bonbon’s of this world is like dealing with a nasty reef just below the surface in a busy shipping lane. You put a large warning sign on top and tell everyone to stay clear.

        Every now and again though they will claim an unsuspecting victim. I just don’t think that Tyler is on the rocks just yet.

        regards,

        Michael.

    • Hi Michael,

      intentionally or not, the keyword is “cult” in deed, spot on!

      On a general note: The amazing thing is, the longer I look around, the more I see people belonging to one cult or another, the whole spectrum, some more, some less extreme and outerwordly.

      Just take the “Unboxing” and/or “Roomtour”phenomenon, just for example.

      http://www.youtube.com/watch?annotation_id=annotation_3088280729&feature=iv&src_vid=9hnayr3-1p4&v=Hd-kwcucksk

      One could write a very humorous essay on this phenomenon, or even make a viral youtube about “unboxing my spanking new “BIO-Toilet-Brush-LIGHT”.

      Sad state of affairs, and not a small cult the above described one. Do you see a difference between the BIO-Toilet-Brush-LIGHT desciples and Larouchepac Web-Junkies parroting ideological fast food ideas of a certifiably not really on the ball chap?

      Exactly, there ain’t no difference!

      :)

  17. CorkPlasticPaddy

    Ladies and Gentlemen who subscribe to this blog. As you must well know by now we have the local and European elections coming up later on this month, so, these elections are going to give you all a chance to ‘do the right thing’. If you want to change this country for the better there is only one thing to do and that is to boycott all of the mainstream parties who have candidates standing in both elections and vote for Independent candidates or ‘People’s Candidates. A vote for anyone else is a vote for more of the same! Do you really want that to happen??? I certainly won’t be voting for any of the mainstream parties in these up coming elections and I hope all of you who subscribe to this blog don’t either!!! If you do then all you’re going to get is more ineptitude and bull shitters like before. YOU HAVE BEEN WARNED!!!!!!

    • I had also planned to put a post out like this, the only way to go is to vote independent.

      However, the lumpen proletariat, riff raff, heaving masses of scumbag ignorami that make up 99% of this so-called country will continue to vote along party lines and we’ll get more of the same shambolic and corrupt adminstration.

      Therefore, voting is an utter waste of time. QED.

  18. Quote from Lucinda Creighton ( today Sunday Independent ) Re: Malaise in Irish Politics

    “There is a complete absence of intellectual rigour in party politics as it now operates. It is a palace of zombies where people who are elected give up their faculties and capacities for independent thought.”

  19. Tyler

    I was shocked to hear this reported by Vincent Browne on Thursday last – relating to one of Fine Gael’s water charge proposals? …that the vulnerable would receive a Free water allowance, but of course, terms and conditions apply !

    Free,in this case,is a daily allowance of “a three minute tap run to allow brush one’s teeth, 2 flushes of the toilet,and a 7 minute power shower !!”

    Can you see intention here ?!

    Can you see the directionality here ? i.e. where this is all heading ??!!

    Can you see the [reductionism] mindset here?

    Can you see the control,the oppression,the dominance?

    If you answered “yes” to all of the above,then you can see surely see the ultimate plan of oligarchy ….to commit us to serfdom!

    start at 11mins 30secs(ish)

    Play then for 6mins

    http://www.tv3.ie/news_sub_page.php?locID=1.2.886

    • Tyler

      What can we consider to be the causes of the WTC’s twin towers’ tragic collapse?

      1. Structural vulnerabilities & weaknesses of both towers?

      2. Hijacked airliners with Kamikaze pilots striking the towers?

      3. Structural fatigue of the buildings due to impact and
      resulting fires

      4. Thermate/explosives?

      5. Gravity?

      Is any one of these five,the [single] root cause for the buildings’ collapse?

      If we zoooom out further,we discover human INTENTION !

      i.e. A terrorist organisation intentionally and wilfully executing this tragic offensive — “willing to do what the other guy wouldn’t”

      Is human intention then the [single]root cause for those buildings to collapse?

      I say Yes.

      Now,let’s look again at the cause(s)of our banking crisis

      1. Structural vulnerabilities in the Irish economy and financial system

      2. Anglo — A hijacked bank with a kamikaze bankster(s)

      3. Structural fatigue [in the economy and financial system] due to wreckless lending policies & excessive borrowing, resulting in incendiary bubbles — Fire

      4. [No oversight of] wrecklessly risky banking practices —- Thermate

      5. Time ( for enough stress and pressure to build and threaten system overheat and collapse )

      Is any one of these,the [single] root cause for the banking crisis?

      As i have already asserted – human intention by Al-Qaeda(??) was indeed the root cause of the WTC’s twin towers’ collapse.

      Similarly,i’m asserting that the intention by brutish empire’s literally ,’winner-takes-all’, oligarchical system,was to engineer an Irish Gov’t backed bailout,[a heist !!!] where private bank debt,overnight,became sovereign debt and at that very moment,a fate of serfdom for future generations,was decided.

      A trap!

      The bank bailout by sovereign was always empire’s ultimate goal and so,the root of the banking crisis!

  20. Tyler

    i just watched this

    http://www.youtube.com/watch?v=VBPZ58dzjfE&feature=youtu.be

    a short talk and then a Q&A session with Kyle Bass…..worth the watch

  21. mediator

    The comments by irish sovereignty and grey fox at the beginning of this article sent shivers up my spine.

    I can remember being told many years ago of the conspiracy surrounding Central Banks going back to henry the 8th and the bank of england:

    “In order to induce subscription to the loan, the subscribers were to be incorporated by the name of the Governor and Company of the Bank of England. The Bank was given exclusive possession of the government’s balances, and was the only limited-liability corporation allowed to issue bank notes.[14] The lenders would give the government cash (bullion) and issue notes against the government bonds, which can be lent again. The £1.2m was raised in 12 days; half of this was used to rebuild the navy.” and their creation and could hardly credit it.

    I did my own research even into finding out who was involved in the original setting up of the Irish Financial System and currency and found
    Prof. Henry Parker-Willis 1st secretary of the federal reserve was chairman of the irish banking commission 1926 which preceded the 1927 currency commission. Note also the continuity between before and after independence via Joseph Brennan “who was introduced” to Michael Collins shortly after the war of independence.

    The powers that be ensure that every there is political change that the essentials stay the same.

    see Libya for example

    Futhermore, I am sure the David is aware of this on some level and either doesn’t allow his consciousness of it to the fore or else like most people he just puts this kind of talk down to conspiracy theory stuff which we all know is code for ridicule.

You must log in to post a comment.
× Hide comments