Cowen - Statement at 7

Cavehill Red

OisinT wrote: »

Read my post again.

The US and Iceland BOTH are in a position to just print more money. That's how they solved their problem.

They also weren't reliant on other banks. If one of our banks failed they'd all fail.
The US bailed out some of their banks too btw.

More nonsense.

America didn't print any money in 08. They only started quantative easing much later.
Iceland didn't print any money either. Their currency was devalued alright, but that wasn't their doing.
They solved the problem by NOT taking on debts that weren't sovereign. That's how they solved their problem. By not making it theirs.

Fluorescence

Cavehill Red wrote: »

Why would we need to take anything off the IMF except to pay for Anglo and AIB debts which ARE NOT THE IRISH TAXPAYER'S RESPONSIBILITY?

Unfortunately they are. They shouldn't be, but they are (and guaranteed too). <insert violent swearing here>

eddison

Actually if I may join in here, its the IMF that are worried !
Its the EU that are worried!
A domino effect will happen quite easily if they let it.
After all Lehmans are not as big as Ireland, and they started allot of stuff.
That is why they are going to be nice to Ireland, and 'please take soe money' otherwise they know full welll of the consequences. So the irish are in a good position to negotiate.

Cavehill Red

fluorescence wrote: »

Unfortunately they are. They shouldn't be, but they are (and guaranteed too). <insert violent swearing here>

So we renege on the guarantee.

johnnyskeleton

OisinT wrote: »

Let's not try to be coy about this. You know exactly what I meant.

The IMF can force a budget through. If the government does not pass a budget, the IMF will tell them what they want done. No budget, no loan.
So, no... obviously they cannot pass a budget themselves, but they can force the government to pass one by with-holding the cash.

The budget is not a matter merely for the government, but for the entire Oireachtas. No one is suggesting that the government won't agree a budget (then it would really be funny), the trouble is for that government to get the support of the majority of Dail Eireann to pass it.

They can't force the Dail to do anything - in fact I would think the IMF would be quite pragmatic about it and would let us have an election before dealing with whatever new government is brought in with the support of the new Dail.

So it really makes no sense to suggest that the IMF can force the budget through, just as you make the unjustified assertion that if the banks were allowed to fail the economy would have been destroyed.

And I'm far from what you might call a mindless optimist, but there is no call to be as extreme as you are, trying to make people fear the alternatives.

Fluorescence

Cavehill Red wrote: »

So we renege on the guarantee.

My understanding of the structure of our government is admittedly poor.. Are we able to force the government into calling a referendum to vote whether or not we continue to adopt private debts as sovereign? Or is that impossible if Lenihan guaranteed it back in 08?

FreudianSlippers

Cavehill Red wrote: »

Sure aren't the EU, the British and the Swedes all queuing up to lend money to us?
And we don't need to visit the bondmarkets for six months?
Why would we need to take anything off the IMF except to pay for Anglo and AIB debts which ARE NOT THE IRISH TAXPAYER'S RESPONSIBILITY?

We don't know yet what money is going where.

If Anglo or AIB fails we'll be in trouble. We depend on, primarily, a relationship of credit/debit between our banks. They are all in the pockets of each other and rely on each other.

We can't really decide on anything until we know what we are borrowing money for. Likely, we are borrowing from the EU so that we do not have to enter the bond markets for quite some time.
That being said, I think the AIB bailout is necessary as it is the biggest retail consumer bank in the country.
Anglo needs to have under-performing assets transferred and then we should default on the rest though.

okmqaz42

Absurdum wrote: »

I can't see how people cannot take to the streets to force them out at this stage

this is Bollox with a capital B

Some people have. Link

FreudianSlippers

Cavehill Red wrote: »

More nonsense.

America didn't print any money in 08. They only started quantative easing much later.
Iceland didn't print any money either. Their currency was devalued alright, but that wasn't their doing.
They solved the problem by NOT taking on debts that weren't sovereign. That's how they solved their problem. By not making it theirs.

http://www.federalreserve.gov/releases/h3/Current/

http://www.nytimes.com/2008/12/28/weekinreview/28goodman.html wrote:

Since late August, the Fed has expanded its balance sheet from about $900 billion to more than $2.2 trillion, creating $1.3 trillion that did not exist to replace some of the trillions wiped out by falling house prices and vengeful stock markets. The Fed has taken troublesome assets off the hands of banks and simply credited them with having reserves they previously lacked.

http://www.creditwritedowns.com/2008/11/quantitative-easing-printig-money-like-mad-to-ward-off-deflation.html

Monty Burnz

Captain Pillowcase wrote: »

Sky News, 2 guests from London are suggesting we should leave the Euro. The guy in the confirmation suit is saying Britan should not help to bail us out but rather help us leave the euro and restructure the bank debts and to let the banks fail..............

Oh right: what we should have done in the first place several years ago, without destroying our credibility, econonmy and self-respect.

Monty Burnz

OisinT wrote: »

If Anglo or AIB fails we'll be in trouble.

That would be a huge improvement - I'd take 'in trouble' ahead of where we are: ****ed. This bull**** about keeping the bankrupt banks going is what got us into this disaster in the first place. Some people never learn.

Go to www.thepropertypin.com and educate yourself about this stuff.

FreudianSlippers

johnnyskeleton wrote: »

The budget is not a matter merely for the government, but for the entire Oireachtas. No one is suggesting that the government won't agree a budget (then it would really be funny), the trouble is for that government to get the support of the majority of Dail Eireann to pass it.

They can't force the Dail to do anything - in fact I would think the IMF would be quite pragmatic about it and would let us have an election before dealing with whatever new government is brought in with the support of the new Dail.

So it really makes no sense to suggest that the IMF can force the budget through, just as you make the unjustified assertion that if the banks were allowed to fail the economy would have been destroyed.

And I'm far from what you might call a mindless optimist, but there is no call to be as extreme as you are, trying to make people fear the alternatives.

My "unjustified assertion" comes from an education in and an understanding of monetary economics and, specifically, cash flow macroeconomics.

Unless you have an understanding of the differences between financing cash flows, operational cash flows and investment cash flows on a macroeconomic scale (especially as they relate to banks) I don't think people are in a position to give a justified position on the topic.

Even if they did, the argument on one side or another is:
1) purely speculative - we don't know the extent of the trouble, the extent of cash flow between banks, etc.
2) moot - because it is economic theory and there is no correct answer.

It is my opinion based on the evidence supplied to us that we needed to bail out Anglo based on the original figures. Now they're way out of control and I'm not sure what we do about that.
But I do know not spending a mere €2bn on re-liquidising AIB would be a mistake.

Captain Pillowcase

At least one good thing might come from this mess and all the open discussion (not from the current government mind!), we may become a more educated population on politics!!!!! :rolleyes:

Sir Oxman

OisinT wrote: »

We don't know yet what money is going where.

If Anglo or AIB fails we'll be in trouble. We depend on, primarily, a relationship of credit/debit between our banks. They are all in the pockets of each other and rely on each other.

We can't really decide on anything until we know what we are borrowing money for. Likely, we are borrowing from the EU so that we do not have to enter the bond markets for quite some time.
That being said, I think the AIB bailout is necessary as it is the biggest retail consumer bank in the country.
Anglo needs to have under-performing assets transferred and then we should default on the rest though.

The money is for the banks - they have been borrowing in spades from the ECB at 1.5% (sorry we have been borrowing as their private debt is our debt).
Irish banks have swallowed up 25% of the loan money available for the eurozone for 1% of the EU economy. The ECB called halt hence we now get to pay 5+% for the bank bailout money to avoid a run on Portugal and Spain.

This will happen eventually so all we are signing up to is more massive debt and putting off the inevitable Euro collapse.

As for Iceland, you should read karlth's posts on boards.ie

Cavehill Red

fluorescence wrote: »

My understanding of the structure of our government is admittedly poor.. Are we able to force the government into calling a referendum to vote whether or not we continue to adopt private debts as sovereign? Or is that impossible if Lenihan guaranteed it back in 08?

I've asked effectively that question in the legal queries forum, but unfortunately the thread is being spammed at the moment.
If I get a sensible answer, I'll let you know.

Dyr

Captain Pillowcase wrote: »

At least one good thing might come from this mess and all the open discussion (not from the current government mind!), we may become a more educated population on politics!!!!! :rolleyes:

just under 20% of this country are still willing to vote fianna fail...

Cheap Thrills!

Phoebe Prince documentary cancelled, FRONTLINE on NOW! :cool:

rte react AT LAST !!!

Terry

Monty Burnz wrote: »

That would be a huge improvement - I'd take 'in trouble' ahead of where we are: ****ed. This bull**** about keeping the bankrupt banks going is what got us into this disaster in the first place. Some people never learn.

Go to www.thepropertypin.com and educate yourself about this stuff.

That's the second time you pimped that site in this thread.
What's up with that?

In the first post, you said that people there predicted the collapse in 2006.
I left school when I was 15 and I was able to see it coming in 2006 too. I made many posts here alluding to it.
Not everyone here is an Alison O'Riordan.

On the bright side, Harney will no longer be minister for health.

johnnyskeleton

OisinT wrote: »

My "unjustified assertion" comes from an education in and an understanding of monetary economics and, specifically, cash flow macroeconomics.

Unless you have an understanding of the differences between financing cash flows, operational cash flows and investment cash flows on a macroeconomic scale (especially as they relate to banks) I don't think people are in a position to give a justified position on the topic.

It's still an unjustified opinion, except that you are asserting expertise to back it up which is hardly capable of being tested.

OisinT wrote: »

Even if they did, the argument on one side or another is:
1) purely speculative - we don't know the extent of the trouble, the extent of cash flow between banks, etc.
2) moot - because it is economic theory and there is no correct answer.

It's not really that speculative. The choices are:
1) completely depressed economy and bankrupt state with long term prospects bleak (blanket guarantee of the banks)
2)completely depressed economy but viable state and improving future prospects (no or partial guarantee).

For all the rhetoric, there are two fairly simple and pretty much undeniable points to be made:
1) the Irish banking system was much bigger than the rest of the Irish economy and the costs of its failure would exceed what the state could realistically pay;
2) even in this world of "credit crunch" etc, money is a commodity that is still in plentiful supply. However, what is lacking is suitable persons to borrow it and invest it (because we're stuck on this NAMA/keep property prices high mania). A good credit risk will ALWAYS be able to borrow money, so long as there is still such a thing as money. But the bailout has made us all (even those of us who were good credit risks) into bad credit risks.

OisinT wrote: »

It is my opinion based on the evidence supplied to us that we needed to bail out Anglo based on the original figures. Now they're way out of control and I'm not sure what we do about that.

The original figures? That were never released to us? That only the government know? That were based on little more than a partial audit and the bank's say so? That based even on the valuations available at the time for development land made no sense whatsoever? That you seemed to be willing to place your faith in the FF government possibly says it all.

But I don't see how Anglo has significantly changed. The losses at present are around the level predicted by several economists. Morgan Kelly in particular warned of the collapse of the banking system and was completely ignored.

OisinT wrote: »

But I do know not spending a mere €2bn on re-liquidising AIB would be a mistake.

I think the real mistake is that you think the cost of providing capital to AIB is a "mere €2bn". You're missing at least an extra 0.

Absurdum

just in

FG TD Charlie Flanagan will be moving for motion of no confidence in Brian Cowen & Gov tomorrow

johnnyskeleton

Absurdum wrote: »

just in

FG TD Charlie Flanagan will be moving for motion of no confidence in Brian Cowen & Gov tomorrow

Won't fly. The cowardly Greens will support FF in the motion "to get the budget through".

FreudianSlippers

Cavehill Red wrote: »

I've asked effectively that question in the legal queries forum, but unfortunately the thread is being spammed at the moment.
If I get a sensible answer, I'll let you know.

Answers you do not like are not "spam"

Captain Pillowcase

Quick tell that woman in the front row of Frontline that her marbles are slipping, they are hanging around her neck and she may totally loose them at any moment, if she stops feeling sorry for Cowen now she may have some hope of retaining them!

K-9

OisinT wrote: »

We don't know yet what money is going where.

If Anglo or AIB fails we'll be in trouble. We depend on, primarily, a relationship of credit/debit between our banks. They are all in the pockets of each other and rely on each other.

We can't really decide on anything until we know what we are borrowing money for. Likely, we are borrowing from the EU so that we do not have to enter the bond markets for quite some time.
That being said, I think the AIB bailout is necessary as it is the biggest retail consumer bank in the country.
Anglo needs to have under-performing assets transferred and then we should default on the rest though.

The amazing thing is, 2 years after the guarantee, after NAMA, nationalising Anglo, INBS and to all intents and purposes AIB, with the ECB propping up PTSB and BOI, we still don't seem to have any idea of what it will cost.

It's amazing that it will take the IMF/EU to cry stop, let's take a couple of weeks to actually get to the bottom of the crisis.

Cavehill Red

OisinT wrote: »

Answers you do not like are not "spam"

Answers that have nothing to do with the topic are spam.
As one of those posters, and a moderator, I'd have hoped you'd know better than to spam threads. Hopefully you'll refrain from here on and let people answer the question without dragging the thread off-topic.

FreudianSlippers

K-9 wrote: »

The amazing thing is, 2 years after the guarantee, after NAMA, nationalising Anglo, INBS and to all intents and purposes AIB, with the ECB propping up PTSB and BOI, we still don't seem to have any idea of what it will cost.

It's amazing that it will take the IMF/EU to cry stop, let's take a couple of weeks to actually get to the bottom of the crisis.

Agreed. I'm actually not a big fan of bailouts, but I think that to pretend like we all know the right answers is bullshít.

If we didn't protect Anglo, we'd have the same threads complaining that the government didn't act.

This FF government is ridiculous and inept, but the replacement will be no better. There's no way to know what would have worked or happened if we didn't bail out Anglo.

FreudianSlippers

K-9 wrote: »

The amazing thing is, 2 years after the guarantee, after NAMA, nationalising Anglo, INBS and to all intents and purposes AIB, with the ECB propping up PTSB and BOI, we still don't seem to have any idea of what it will cost.

It's amazing that it will take the IMF/EU to cry stop, let's take a couple of weeks to actually get to the bottom of the crisis.

Agreed. I'm actually not a big fan of bailouts, but I think that to pretend like we all know the right answers is bullshít.

If we didn't protect Anglo, we'd have the same threads complaining that the government didn't act.

This FF government is ridiculous and inept, but the replacement will be no better. There's no way to know what would have worked or happened if we didn't bail out Anglo.

Sam Kade

Degag wrote: »

Sticking to RTE. Hearing Sky referring to him as "The Prime Minister" is just annoying.

True, did we ever call their prime minister an taoiseach?

Dyr

K-9 wrote: »

The amazing thing is, 2 years after the guarantee, after NAMA, nationalising Anglo, INBS and to all intents and purposes AIB, with the ECB propping up PTSB and BOI, we still don't seem to have any idea of what it will cost.

It's amazing that it will take the IMF/EU to cry stop, let's take a couple of weeks to actually get to the bottom of the crisis.

"jays that black hole looks deep, f**k it brian... throw a billion down it and see if we can hear when it hits the bottom"

"fair nuff chief"

whhheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee.....

"jays, throw 6 billion into it, that'll do it..."

12 months later...

johnnyskeleton

OisinT wrote: »

If we didn't protect Anglo, we'd have the same threads complaining that the government didn't act.

The golden circle don't post on boards.ie.

Seriously though, what would people be complaing about? Why, the inability to get credit of course. What do people complain about now? Mmm?

johnnyskeleton

Sam Kade wrote: »

True, did we ever call their prime minister an taoiseach?

But he is a prime minister. The Irish prime minister's title is Taoiseach.

All Taoisigh are prime ministers, but not all prime ministers are Taoisigh [sorry about the spelling].

Lord Trollington

Its like arguing over what brand of condom your going to use after you've gotten pregnant... Lol

Captain Pillowcase

We'd be better having X factor....yeah but which one is Wagner.....They are all Wagner!

Donkey Oaty

johnnyskeleton wrote: »

but not all prime ministers are Taoisigh [sorry about the spelling].

10/10 for spelling, Johnny.

dr.bollocko

Cavehill Red wrote: »

Answers that have nothing to do with the topic are spam.
As one of those posters, and a moderator, I'd have hoped you'd know better than to spam threads. Hopefully you'll refrain from here on and let people answer the question without dragging the thread off-topic.

Leave the modding to the mods. Attack the post not the poster is a good watchword to use here.
Folks please report any posts which cross the line.

Absurdum

Tony Killeen got LOLed at

Absurdum

uh oh

http://www.guardian.co.uk/business/2010/nov/22/90bn-irish-bailout-turmoil-europe?CMP=twt_fd

€90bn Irish bailout ends in turmoil – now Europe fears crisis will spread

Jill Treanor, Nicholas Watt and Henry McDonald in Dublin
guardian.co.uk, Monday 22 November 2010 21.16 GMT

• Brian Cowen defies calls for resignation
• Fears that Portugal and Spain may need aid
• International rescue plan does little to calm markets

Financial markets were thrown into turmoil today amid fears that an imminent collapse of Ireland's beleaguered government would have a knock-on effect across the eurozone.

The announcement of the potential €90bn international bailout for debt-laden Ireland – of which the UK could contribute up to £10bn – offered only a temporary respite to nervous markets.

By tonight, concerns that Portugal and even Spain might also need their own rescue packages were rising and sent the euro and shares falling while the risk of holding the debt of potentially vulnerable countries rose alarmingly.

After a tumultuous day in Dublin, where protesters tried to storm the parliament building, the prime minister, Brian Cowen, defied calls for his resignation but conceded he would call an election in the new year. The move was forced upon him after the Green party pulled out of his fragile coalition government, unnerving markets on a day which was supposed to restore confidence in Europe's decade-old single currency.


etc
etc

Donkey Oaty

where protesters tried to storm the parliament building

Did they fiddlesticks.

stepbar

phasers wrote: »

The pipe is gone (has been for about 9 hours, WTF UPC) but I heard Mary O'Rourke on 98FM there, my God that horrible auld bitch has some fcuking neck

She always reminds me of jabba the hutt in Star Wars.

Captain Pillowcase

Oh look our accent has changed already!!! ja???

K-9

OisinT wrote: »

Agreed. I'm actually not a big fan of bailouts, but I think that to pretend like we all know the right answers is bullshít.

If we didn't protect Anglo, we'd have the same threads complaining that the government didn't act.

This FF government is ridiculous and inept, but the replacement will be no better. There's no way to know what would have worked or happened if we didn't bail out Anglo.

Yep, we don't know what would have happened. Labour and their nationalisation policy seems to be not that different to the current policy, we'd end up owning all this mess, same as the current "policy".

This is our Govt. though and they have advisers on policy matters to make the decisions. I completely understand it is more nuanced than the average person thinks it is but we've 2 years of guarantees, nationalisations and the Govt. becoming major shareholders in banks and it is still a mess, still dependent on Irish and European Central Bank funding.

Exiled on Dame Street: countdown to a crisis

By last week, it had also communicated its mounting concerns about the Irish Central Bank's own funding of at least three lenders – Anglo, Irish Nationwide and EBS – and possibly AIB too through Dame Street's special emergency funding facility.


By the end of October, excluding the approximately €40bn ECB funding sourced by banks in the IFSC, Frankfurt had loaned the main-street Irish banks €90bn. The ECB appeared to want to put a cap on its funding.


Separately, Dame Street had loaned almost €35bn to Irish lenders by the end of October, and the ECB wanted to control the amount the Irish Central Bank could fund too.

We were winging it, hoping it all would go away and the ECB called our bluff.

It isn't surprising considering that has been the whole policy for the last 2 years.

I hate tribunals, but there needs to be some type of investigation into what happened over the last 2 years.

Standard Toaster

Alot of this is over my head but was just reading this:

Irish bailout: could the bill exceed €200bn?

As someone said how about instead, we default on all that debt.Then DE/FR/UK gov'ts would have to bilk their own taxpayers for the bailout costs of their respective banks. How realistic is that?

Cavehill Red

And some reckon we're going to default whether we take this money or not.

More here - http://www.nytimes.com/2010/11/23/business/global/23default.html?_r=1&hp

strobe

Absurdum wrote: »

uh oh

http://www.guardian.co.uk/business/2010/nov/22/90bn-irish-bailout-turmoil-europe?CMP=twt_fd

:eek: I'm kinda getting spooked. Seriously thinking about changing my euro to AUD tomorrow morning and sticking it in a safe. Can't really see a possible downside at this point in time.

Anyone give me a reason this would be a bad move?

K-9

Excellent piece from the Tribune and what we did wrong:

So what did our government do wrong? Answer: everything

Facing into two bailouts, Irish government policy evidently failed. Now we ask if there was anything the government could have done differently? The answer, almost everything.


Tell the truth



Not just in the last two weeks, but during the last two years. Here's one for future researchers – does Ireland have the largest public relations industry employed by private companies, banks and government in Europe?


Bankers got so used to telling lies during the boom that they carried on lying to the government about the insolvent banks. The government then evidently baulked at telling its citizens the truth over the last two years and obscured the status of our insolvent lenders. By so doing, the hole for future generations may be even deeper. This sickness was shown in the last two weeks. Had the government told the truth about the insolvency of the banks two years ago, the debts that needed to be repaid may have consequently been lower.


Ten days in September



This is not a reference to the infamous September late night two years ago when the government, after meeting with its advisers and Ireland's top bankers, mortgaged multiples of what it gets from us in annual tax revenues to guarantee a huge tower of private debt built by the same private bankers.


In September 2010, the scale of the catastrophe became clear: the Irish authorities had allowed the banks to dangerously bunch huge amounts of bond debts into a few days in September. Banks keep their doors open week-by-week by deciding how much cash is coming in and calculating how much they need to raise by issuing bonds to other banks. But cut off from the so-called inter-bank markets, the Irish banks were forced to turn to the European Central Bank, the lender of last resort, by pledging their loans or assets as security to get cash in return.


As the original guarantee was coming to a close, the Irish authorities inexplicably allowed the guaranteed banks to erect a so-called 'wall of money' in tens of billions of euro that required rolling over during a few days in September. The ECB had earlier this year looked on in horror as AIB hit a huge road bump in refinancing when Ireland's largest bank failed to tap some sort of loan. It is becoming clearer that the strain was much greater than anyone could have suspected because some lenders soon exhausted the assets the ECB was prepared to accept.


September's 'wall of money' may have been the reason the ECB finally called time on Ireland by telling the Irish Central Bank to cap its funding lifeline. Irish banks together were getting between 15% and 25% of all the funding provided by the ECB to banks across all the 16 countries in the eurozone.


But the bunching of the banking finances across a few days in September led to the explosion of the sovereign bond rates, as sovereign bond holders realised that the ECB was worried aboit funding the banks. The bluster of government ministers last weekend denying any bailout talks was designed to disguise the evident nature of the interlinked banking and sovereign blowouts. But why did the Irish authorities over the last two years allow a banking crisis turn into a sovereign blowout by failing to manage more smoothly the Irish banks funding needs? As the banking guarantee came up for renewal, they instead allowed the banks to erect a huge insurmountable wall of money that needed refinancing. September days will take on a new meaning for generations to come.


Late nights, September 2008



What should they have done differently with the blanket guarantee? Not listened to the advice of the bankers, of course, and bought time by introducing a partial guarantee. The bond debts of Anglo could have been guaranteed, say, to March 2009, buying time to examine the other toxic bank, AIB, too.


Former US treasury secretary Hank Paulson wrote in On The Brink, his diary-like account of the Wall Street crisis, as he learned about our blanket guarantee early Tuesday morning on 30 September, 2008. "Ireland said it would guarantee payments on as much as €400bn in bank debt. The figure guaranteed nearly the entire Irish banking system and amounted to twice the country's gross domestic product, " he pointed out.


Taoiseach Brian Cowen and finance minister Brian Lenihan have quoted the 'bible' on the September 2008 blanket guarantee, the report written by Central Bank governor Patrick Honohan into the domestic banking implosion. The new governor should not have commissioned himself to write a report on the failed watchdog and he pulled his punches. Nonetheless his report said that the government was blindsided by the true nature of the banks' debts when it agreed to introduce the blanket guarantee.


Nationalise the banks



Here's the puzzle. The theory of nationalising banks is that the government has to step in when the shareholder equity has evaporated. The real purpose is for the state to find out what is going on before, during and after it pumps public money into private institutions. That is what happened in Sweden in the mid-1990s. Yet, the government here pumped money in, took small chunks of ownership and kept the banks open. And the banks continued to lie to them.


Many were taken aback to hear EU monetary affairs commissioner Olli Rehn say in recent days that the EU had to establish the facts and discover the real state of Irish banking. Like any good lender, the EU, before bailing out Ireland, wants to find what it is getting into with the Irish banking scandal. So, how did the government not know the losses in the banks a full two years after guaranteeing them? Why did banking directors, who have a legal responsibility to produce real figures, never mind the minister for finance, report on the real value of the banks' accounts? Consultants and auditors have done well out of the banking crisis that has led to the loss of our national sovereignty.


Burn the private bank bondholders



Not just the subordinated but the senior debt holders. This could have been done two years ago, but it may be too late now. Put simply, the government saved the banking bondholders and betrayed its sovereign bond holders. Betraying sovereign bondholders means that the government betrayed current and future generations because they will have to pay back much larger sovereign interest rates. Worse, Ireland may, with Greece, be forced into defaulting on its sovereign debts, with consequences for generations of Irish people.


Nama



Nama did not cause the banking crisis but it was led down a blind alley. The theory of setting up a so-called asset management agency is that it quickly takes the bad loans off the banks. Sweden achieved this by setting up a bad bank and taking bad loans from lenders in quick time. But Nama was neither a bad or a good bank, it was a strange hybrid that took out both the good and bad loans. It was hindered from the start because the banks were not nationalised. But Nama itself has complained it has continued to be misled by bankers.


Anglo Irish Bank



This is where government policy got truly bizarre. Anglo was allowed to draw up a business plan to the European Commission earlier this year that proposed that the toxic lender would boost its balance sheet to levels of the boom.


The move was one step from insanity and Ireland's credibility in Brussels started to fray. Then the government let the bank revise its plan. There would be a good Anglo and a bad Anglo, not forgetting that part of Anglo that was already marked off to go into Nama. The bank then bluffed about the additional costs of closing down the bank. All the time, the private banking bondholders of the nationalised bank were still getting repaid by Irish taxpayers. So, what could have been done differently? The model was there by the actions of Bank of Scotland Ireland. It did the conventional thing by closing for new business and hived off the deposits. Anglo's whole loan book ought to have been shifted into Nama overnight.


AIB



Instead of setting up a banking commission, the government should have investigated the toxic bank, AIB. The puzzle is the power that insolvent AIB has continued to wield over the past two years. Former AIB executive and non-executive directors have had a good banking crisis. Some have been re-appointed to other insolvent banks and as government advisers. Minister for Finance Brian Lenihan showed flawed judgment in listening to advice and then failing to clear out the boards of AIB and Bank of Ireland. There are plenty of senior managers in the banks and outside the banks who could have done the job better in the last two years.


Government officials need to understand markets



We live in a world of markets, yet the civil service was designed for an economy of the 1950s and few in the public service seem to understand them. The guardian of the EU statistics, Eurostat, did not allow the government to spread its banking recapitalisation over 10 years.


Officials then faced the near-impossible task of presenting the largest 'kitchen-sink' budget deficit in peacetime Europe – 32% of GDP – because of the huge debts of the insolvent banks. Our national sovereignty was under risk from that moment on.


Fight for the 12.5%



The game was up when on the day before the IMF officials arrived here the Latvian president offered Ireland its moral support on CNBC.


'Éireann Go Broke' and 'How did Ireland Go So Wrong' were only some of the articles to be read by the influential business leaders in the international business press.


We will have to grin and bear pictures of beggars, ghost estates and film crews in Irish pubs, all of course explaining our indolence.


But our only goal now is to save the 12.5% corporation tax rate. The government has not only steered us into national bankruptcy, but it has put at risk our only means of getting out of it. Let's lose the attitude, and build a coalition of Baltic, Iberian and Greek states.

I'm not naive , I don't expect them to get everything right, but to consistently get it wrong like this is madness.

Cavehill Red

strobe wrote: »

:eek: I'm kinda getting spooked. Seriously thinking about changing my euro to AUD tomorrow morning and sticking it in a safe. Can't really see a possible downside at this point in time.

Anyone give me a reason this would be a bad move?

Aussie dollar is overvalued. The ratings agencies are looking at downgrading Australia too, apparently. NZ got downgraded today.
Perhaps precious metals or the Swiss Franc (also overvalued but a stable safe haven) might be other options.

Sam Kade

johnnyskeleton wrote: »

But he is a prime minister. The Irish prime minister's title is Taoiseach.

All Taoisigh are prime ministers, but not all prime ministers are Taoisigh [sorry about the spelling].

Where in that comment did I say that he wasn't prime minister?

johnnyskeleton

Sam Kade wrote: »

Where in that comment did I say that he wasn't prime minister?

You were agreeing with another poster who was getting annoyed by him being called Prime Minister, and you commented on why we never called their Prime Minister a Taoiseach. But the leader of our parliament can be called Prime Minister or Taoiseach, one is a description the other the title, but their Prime Minister's title is "Prime Minsiter", so calling them Taoiseach wouldn't make any sense.

brianthebard

K-9 wrote: »

Yep, we don't know what would have happened. Labour and their nationalisation policy seems to be not that different to the current policy, we'd end up owning all this mess, same as the current "policy".

Labour's nationalisation would be very very different to current FF policy.

johnn

Cheap Thrills! wrote: »

We need a second pair of eyes on the figures.

There is NO TRANSPARENCY on this HUGE deal we are commiting to for the next half century. Behind all this is a weak euro and a downward world economy.

In ANY sensible business faced with a decision like this (especially with two bilateral offers from Sweden and the UK, of which yet we don't know the rate) we NEED to see the books. We need a second pair of eyes. I don't kid myself they will be objective BUT WE elect them. WE demand transparency and professionally executed economics.

We need a say in the detail here. WE are not obliged to German bondholders any more (they're on the backfoot now, the taxpayer is doing them a huge favour)

A FF Government will have decided to prioritise bondholders and cronys first. We dont want that. Families and single people in trouble need immediate help and FF dont care about that.

Cowen thanked everyone last night EXCEPT the Irish people. Don't swallow any more of this bull$h!t spin. We have to get rid of them to get our say!!!!

Remember this is OUR MONEY he's spending. Don't you want to see the books?

Now this is the type of scare-mongering I can't stand, if they were to show the books to the Irish public half of them wouldn't even understand them anyway :rolleyes: