Iceland! Iceland! Collapse! Collapse!

I’ve noted on a number of occasions that both Brian Lenihan and Brian Cowen are very fond of misleading analogies in which any proposals to nationalise the two main Irish banks are linked to events in Iceland. For example, I noted recently that in an interview with Business and Finance, Minister Lenihan linked Iceland’s banking system collapse to a decision to nationalise. Some of the Minister’s bigger fans on this site argued that he was merely citing the sequence of events rather than indicating any actual causation.

Well, on this evening’s edition of The Last Word on Today FM, Minister Lenihan was at it again (podcast here — the interview is during the first hour of the show). In addition, as is usually the case when Lenihan and Cowen discuss this issue, the principal point of the discussion appeared to be to link the Labour Party’s position on the banking crisis to that of the Icelandic government. About 53 minutes in, the Minister said:

We didn’t go off, again like Iceland, and nationalise the system overnight because that lead to a banking collapse in Iceland. That’s what some of the Labour Party people wanted us to do in the last year.

(Cue philosophical debates in the comments about the meaning of the word “because” or perhaps “lead”).

It is, of course, possible that the Brians really believe this stuff. So, on the off chance that these statements represent an honest misunderstanding, I have some reading suggestions which Department of Finance officials might consider distilling into a short report for the Minister for Finance and Taoiseach.

First, click here to read about the report on Iceland’s banking problems written prior to the collapse by (now sadly departed from blogging)  Willem Buiter and Anne Sibert and for a link to the report itself. The key point here is that Iceland’s banks engaged in a strategy that had them doomed for collapse once the international financial crisis took hold. With enormous foreign currency liabilities and no access to ECB lender of last report facilities, there was simply no strategy that the Icelandic government could have adopted that would have saved their banks from collapse.

Second, click here for a House of Commons Treasury Committee report on the Icelandic banks and the UK government’s role in the crisis (Alastair Darling does not come out of it too well.) The report makes clear that any nationalisations that took place were in response to an ongoing and escalating crisis. The idea that Iceland’s current sovereign debt problems stem from a single misjudged decision to nationalise some banks is ridiculous.

Beyond the obvious conclusion that this stuff exposes the Brians as either clueless about what actually happened in Iceland or else willing to mislead the Irish public on a key issue in order to score a political point, there is a substantive point worth emphasising here.

If it turns out that, by May or whenever it is that the banking system finally has to be recapitalised, the two main banks do need to be mainly or fully nationalised, it simply will not be helpful that the Taoiseach and Minister for Finance have spent most of the previous year screaming “Iceland! Iceland! Collapse! Collapse!” whenever nationalisation came up.

70 replies on “Iceland! Iceland! Collapse! Collapse!”

@Karl Whelan
The minister’s goal – since the famous interview on The Front Line when he terrorised the audience – is to use “Iceland” and “Nationalisation” in the same sentence at every opportunity. It’s bonus points if he can work in the Labour party as well. He ALWAYS does this and – Senior Counsel and charismatic super villain that he is – it is COMPLETELY intentional.

Anyone who comes on – always from the NAMA lobby – and claims otherwise being utterly duplicitous.

@ Karl Whelan,

You are a wonderful man to keep up this persistent view, that (temporary) national-isation is a viable strategy for Ireland. Again, I commend your perserverance. Keep it up, it is good to see someone so committed to work with a particular solution, any solution. BOH.


I think the war has been lost and the debate is over. NAMA has been passed by the Dail as a concept. The Business Plan is in Brussels awaiting approval.
It will result in majority stakes in the two banks in excess of 60% for the state.
It will provide up to 54billion in funding through the issuance of government debt to the banks for the said toxic assets which will remain ECB eligible collatoral.
The net effect may make the banks fit for purpose.
No other policy has the same features.

I heard that interview. Matt Cooper is quite often a terrible interviewer, unwilling to properly challenge the interviewee (especially when its Michael O’Leary).

This applies to most journalists in Ireland. Outside of the Sunday papers not many seem to have a great grasp of economics. What a shame we didn’t have George Lee with RTÉ during that crucial period when we needed economically literate journalists.

The two Brians are both very intelligent, and probably honest. They are just totally economically uneducated. Unfortunately the general public confuse Lenihans genuinely good rhetorical skills with competence at his job. This confusion will continue until we have some probing economic journalists in the mainstream media.

Is it a coincidence that Lenihan’s approval ratings went up when George Lee left RTÉ?

Hey – if they can twist the story about NAMA and what the IMF said (Cowen’s defence last night was along the lines of “think how bad it would be without NAMA”) then they will have no problem telling this in a style to suit themselves.

Why do so few journalists ever seem to challenge what politicians say in Ireland? They could get up there and say “white would lead to economic collapse so we are going to make it black and turn all the lead on your local church roof into gold.” The journalist would probably ask the politician if he (or she) should go out and buy lead now before the bubble inflates.

There’s got to be a joke there somewhere about alchemy and the way this economy is run…..

@Karl Whelan – “the two main banks do need to be mainly or fully nationalised”.

Karl – serious question. Can you partially nationalise a bank?

Pardon the analogy but isn’t that like being a ‘little bit’ pregnant?

“Karl – serious question. Can you partially nationalise a bank?”

I reckon it’s what we’re about to do. What percentage shareholding is the state going to end up with after recapitalising. Joe mentions excess 60%. Looking at how much people are speculating the banks need it may be north of 80%. That’s pretty close to nationalisation to me. I suppose we’ve done it without the shock to the system Iceland had. On the other hand which would you prefer death by 1000 cuts or a knife to the gullet. It will be interesting to watch Ireland vs Iceland over the next 10 years. At least they got to devalue their currency and are forced to take drastic action to recover. We’re tinkering around hoping a world recover will pull us out of this (which Jto I accept might happen)

@ Joe

I’m not trying to re-run the old debate (and won’t take up the offer to do so via your TINA comment about “no other policy.”)

No the points I’m making here are

1. If your excess 60% prediction comes true, you know as well as I do that the headlines will say Ireland nationalised its two main banks (and Joseph has a point about being partially pregnant.) It won’t be helpful to have a history of these kinds of comments.

2. Public debate on a very serious issue is not improved by consistent repitition of falsehoods by the key figures in our government. I consider it to be part of the role of academic commentators to at least attempt to keep the debate honest.

@Karl Whelan – “I consider it to be part of the role of academic commentators to at least attempt to keep the debate honest.”

I couldn’t agree more ….. as it should be for journalists.


I said may make. By may, I mean the process of transferring the assets and raising equity to an appropriate level (ie core T1 of 7-8%) may leave banks with adequete capital & access to liqudity. This may leave them in a position to do what banks do.

For all its obvious flaws, no other policy has the same features and is guaranteed to get to the same end point.

A noticable absence of comments on this thread from some of the more vocal backers of govt policy.

It seems to me at this stage that everybody knows the nationalisation is coming sooner or later. The game has become about making sure bank stakeholders receive as much public money as possible before that happens.

We will nationalise, but not until share prices have been inflated so as to make the nationalisation as expensive as possible.

We will nationalise, but not until bondholders get as much of their money out of the broken zombie banks as possible, via inflated debt-for-equity swaps (on their terms, not ours!)

NAMA is the tool which guarantees that share prices stay high (high is anything above zero, given the banks are completely broke) and debt obligations can be redeemed.

The only thing surprising about little is being commented on how utterly NAMA has failed in its stated objectives of making the banks solvent, kick-starting the property market and possible making a profit for the taxpayer.

I think it is becoming increasingly hard for anyone to argue that a preemptive nationalisation would not have been better for the taxpayer and the economy as a whole.

Yes there were several other policies proposed that would have led to a similar or better end point. You clearly have not been following the debate here very well.

joe lawlor,

I think it is generally accepted that NAMA will not produce the required T1.

Certainly the case for Anglo (another €4 to €6) & Irish Nationwide (another €2).

Most likely the case for AIB (another €4?)

BoI (another €3?).

The stated aim if NAMA to

1) Recapitalise the “banks” by paying more than market value for the dud assets.

2) Get credit flowing to SMEs

is a busted flush.

Lenihan is left with the Iceland defence and he will use it again and again.

He may yet be forced to use the Greek defence.

“If the very bad men hadn’t pushed Greece over the edge NAMA would have worked”.

@ Graham

“A noticable absence of comments on this thread from some of the more vocal backers of govt policy.”

Thread posted: 12.24am.
Time of your comment: 08.50am

Not entirely sure what you were expecting to be posted in that window.

I’m going to refrain from posting on here as it is territory we have been down many many times before (im not taking the bait this time Whelan!). If people can’t deal with an evolving situation, and that appears to be the case for lots of the commentors on here who don’t difference between nationalising/debt-restructuring then vs now, then thats your problem, not mine.

‘I’m going to refrain from posting on here ‘

I think even you would agree that that is not entirely accurate. When is a post not a post?


So, instead of a real comment, some vague insults and a statement that you will not stoop down to the level of this debate.

That’s unfortunate, because in the absence of your explanations as to what the difference between nationalisation/debt restructuring then vs now might be, I will be left to assume its the following:

– 18 months of zombie banking – no credit flowing
– Billions pumped into Anglo
– Property market frozen at ridiculously high levels
– Share prices of AIB and BOI jacked up
– sub bondholders eased out of risk at a NAMA/BGS-inflated price

“If it turns out that, by May or whenever it is that the banking system finally has to be recapitalised, the two main banks do need to be mainly or fully nationalised, it simply will not be helpful that the Taoiseach and Minister for Finance have spent most of the previous year screaming “Iceland! Iceland! Collapse! Collapse!” whenever nationalisation came up.”

Or they could be hailed for their legendary foresight…

PS 80% ownership is pretty much complete ownership. The market view, like that of AIG, would be that these are nationalised companies. Look at what has happened to AIG’s share price…

Hundreds of rooms but nobody staying, our vast hotels have to serve their time as the living dead before investors get their tax break, writes ANN MARIE HOURIHANE

DEVELOPER RAY Grehan faces legal action by Dublin City Council for running an unauthorised car park at the former veterinary college site in Ballsbridge for which he paid more than €170 million four years ago.

Ireland! Ireland! Collapse! Collapse!

@ Graham

vague insults? thats a bit harsh, i didn’t think i was being vague at all… Just kidding.

You asked why no one commented on this thread between 12am and 9am. The first suggestion is that people were asleep. The second offering is that this is old ground, repeatedly debated and argued over on here, most recently around a week and a half ago, when i gave a reasonably thorough view on lots of points of discussion, particularly v-a-v Iceland, which is actually what this thread is supposedly about. As i said above, the situation has evolved, but the debate doesn’t appear to have kept up with it.

Eoin, the situation may well be evolving – though I would dispute how it has any material impact on nationalization – but that does not change the facts.

1. The minister constantly cited Iceland nationalizing the banks as a reason for the economic collapse there.

2. You and Zhou repeatedly said that the minister said no such thing and tried to spin his words to say that we were claiming “post hoc ergo propter hoc.”

3. Now that it has been shown that the minister did indeed mean propter hoc and not just post hoc you start talking about the “evolving” situation.

4. None of this takes away from our contention that the two Brians have lied and obfuscated their way through all of this. They have chosen not to release information from the IMF. They have chosen to scare-monger and then accused others of scaring the horses.

5. None of this inspires much confidence in their abilities.

6. Being good at rhetoric does not mean being competent at one’s job. Alas people have been confusing the two and undeservedly praising BL.

@Garo – “They have chosen to scare-monger and then accused others of scaring the horses.”

….and let’s not forget Dr Fitz’s contribution to that.


NAMA does not recap the banks. Done properly, it takes the bad assets away in a skip and leaves the residual cleaned upbalance sheet.
Injection of public or private capital into the banks is the first srtep to recap
the 2nd step is the restoration to profitability.

“Being good at rhetoric does not mean being competent at one’s job. Alas people have been confusing the two and undeservedly praising BL.”

Nonsense. Professor Lucey is eminently deserving of praise.



“Done properly, it takes the bad assets away in a skip and leaves the residual cleaned upbalance sheet.”

Have you forgotten that it is designed to also take “good” loans? That is supposedly how the bad loans won’t create a loss for the Citizen/Taxpayer. By taking good loans as well as bad the future profitability of the banks is impaired.

“takes the bad assets away in a skip”

That says a lot.

“NAMA does not recap the banks.”

Quite, and the probability of the “banks” raising Tier 1 capital in the market must be approaching zero.

Debt buybacks might help improve Tier 1, but with a moratorium on coupon payments where will the money come from?

Selling overseas operations might help, but only if gains can be realised.

The humdinger in my opinion is the conversion of the NPRF preference shares into ordinaries. How does that help Tier!? Must admit I don’t see it.

@BrianJ: Very funny. Not!

@Joseph: Yes indeed, Garret the not so good. It seems to me that the Irish establishment is so intent on keeping up Ireland’s reputation for outsiders that they not only ignore but actually encourage the termites eating it up on the inside.

@ Greg
Oversight on my part. Yes it is taking some good loans although quite why is questionable.
Correct low probability of private capital although the cleaner the balance sheet and the more dilution of existing shareholders the better.
Yes asset sales reduce the amount to be raised raised as do debt buybacks
NPRF coversion is neutral to T1 but it improves core T1 which is the target metric.

“NPRF coversion is neutral to T1 but it improves core T1 which is the target metric.”


99% of the funds raised are already in the “Share Premium Account”.

Is that not Core T1?

Ulster Bank is already partially nationalised via the UK government stake in RBS. If the Good Friday Agreement was Sunningdale for slow learners, the May 2010 capital program for B of I and AIB will be just RBS/Lloyds for slow learners.

The reality is that neither Eoin nor Joe Lawlor consider massively deceiving the public to be a serious matter. Zhou thinks it’s a good policy!
Eoin is saying that we should all move on….from what he was saying 12 days ago!
Karl raised Lenihan’s Iceland terrorism.

Eoin replied:
“Interestingly this is pretty much what Lenihan says in the interview, and not in fact that “Iceland’s problems stemmed from nationalising its banks”…”

Karl replied:
“This is an exact quote from the audio:
“When Iceland nationalised her banks, funding collapsed and the economy collapsed with it.”
Like I said, he is suggesting a direct line of causation from bank nationalisation to economic collapse.”

Did Eoin leave it there? Of course not! He made another FIVE posts on the thread!

Before the country can evolve we need the full, blunt truth. Instead we get last ditch resistance from FF/PD/Developers/Bankers/Bank Investors. They can’t admit to anything – even what Minister Lenihan actually says. We’ve made every effort to convince them they are wrong. Nothing has worked.

Is jail the only answer for the Irish establishment? I am sorry but I now think when I angrily proposed 400 should be jailed I was right. They will NEVER get it. It’s what we do to those who don’t pay their €160 TV licence. So those who wrecked the country and caused tens of billions of damage deserve no less.

Jail them. Jail 400 of them. It’s the only way.


the regulator includes these intruments in core T1 but I am not sure the market does as they are only loss absorbing in liquidation. Equity is equity.

@ Joe

so its a debate over T1 vs CT1 vs “real” CT1? And they wonder why people are confused at bank capital levels…

Breaking…(unconfirmed but being taken seriously)




Would certainly ease the pressure further on Ireland…


“the regulator includes these intruments in core T1 but I am not sure the market does as they are only loss absorbing in liquidation. Equity is equity.”

I’m sure the market is fully aware of the regulations.

The market is also aware that Core T1 Share Premium is available to absorb losses prior to liquidation.

“NPRF coversion is neutral to T1 but it improves core T1 which is the target metric.”

So, not only, is the conversion of the Preference Shares into Ordinary shares neutral with respect to T1 it is also neutral with respect to Core T1. Is there some other “metric”?

How you can imagine that the market will perceive some bookkeeping semantics as improving the capital structure of the banks is beyond me.

The conversion of Preference Shares to Ordinaries has one purpose and one purpose only (one which the “markets” will be fully aware of) and that is to relieve the banks of the necessity of paying €560,000,000 in Preference Dividends per annum in perpetuity.

Mind you, the Warrants will be found out to have been as useless as they day they were promised.

Maybe you have a view on how Preference Shares with a Nominal Value of €0.01 (given that the €0.99 has already gone to “common” share premium) can be converted at Par.

Again, this escapes me.

As of now AIB has a market capitalisation of €945m. If the Prefs were converted at par that would give the NPRF 79% of AIB ordinary stock.

The point being, it wouldn’t improve Core T1 one iota.

So when they need more capital the ordinary shareholders will be wiped out.

The conversion of the prefs will do nothing to get over the hole in capital created by NAMA.

Unless, of course, it is the Governments intention to write off the prefs.

Ok lets move onto core equity Tier 1. Are the prefs really loss absorbing short of liquidation other than stopping the coupon payments?


The prefs have a nominal value of €35,000,000.

The remaining €3,465,000,000 was taken directly to Share Premium.

It is not “ring fenced”.

The €3,465,000,000 is loss absorbing at any time. It doesn’t have to be a liquidation event.

The €35,000,000 is not loss absorbing other than in a liquidation (restructuring) event.

Excellent post.

“he Brians as either clueless about what actually happened in Iceland or else willing to mislead the Irish public on a key issue in order to score a political point, there is a substantive point worth emphasising here.”

I would say the wilful misleading (I could be a lot stronger) is done for stronger reasons than to score a political point. It has been used over and over again by the Minister for Propaganda, Brian Lenihan, to bully the country into submission to accept the guarantee, NAMA and much much more.

The free pass given to Lenihan by the press is so glaring, galling and pathetic. It is bias plain and simple. Notice how the IT reported the IMF NAMA story months after it was reported here.

@David O’Donnell Says: Halifax Bank of Scotland (Ireland) deserting the ship

I forget how long ago it was I predicted that the banks would start shedding jobs in 2010. Especially those that will soon be dumping their rubbish into NAMA and no longer beholden. The HBOS is just a small sideshow.


Course they will. And they will probably trot out the old ‘market forces’ mantra without as much as a twitch of an eyebrow ……… market forces are, apparently, only for the little people.

Bzzt-rally monkey here, I know I promised to be good, sorry about the Greece thing, it just slipped out. Old CNBC habits die hard…
” BERLIN, Feb 9 (Reuters) – Reports that the euro zone has made a decision to help debt-stricken Greece were unfounded, a spokesman for the German government said on Tuesday.

“Government spokesman Ulrich Wilhelm rejects as unfounded reports citing coalition sources saying a decision for aid for Greece has in effect been made,” a government official quoted him as saying. Reuters had earlier reported a senior German ruling coalition source as saying euro zone countries had decided in principle to help Greece.”

@ YM

oh goodie, fun times to be had in the markets in the morning…still think the cats out of the bag and the Germans are talking about a bailout though…

Bond. Eoin Bond…


Look. It’s very simple, and, fair enough you have been studiously avoiding any reference to the value of the Preference Shares in which the National Pension Reserve Fund invested €7,000,000,000.

So, as a banker.

What is your current valuation of the €7,000,000,000?

If I were offered the Preference Shares in AIB and BofI tomorrow, for cash (and knowing that the Warrants are valueless) how much “in cash” should I give?

Long Term Economic Value aside.


“sorry about the Greece thing”

I’ll bet you €3,500,000,000 Preference Shares in AIB against Eoin’s valuation of his bonus next year that the Derivative Death Star just powered up.

Peonage: a system in which debtors are bound in servitude to their creditors until their debts are paid. Applies to nations too and can persist for generations.

The Greeks Socialists have just done one of two things; either they have consigned their nation to peonage for the foreseeable future or they have achieved by a miracle of perspicacity the start of the process by which the ECB is demolished and the people of Europe eventually emerge into a state of economic freedom.

We know the Greeks are clueless on this issue. However, it is possible that the latter possibility may apply and they have inadvertently started the ball rolling.

It is also true that we were just as blind as the Greeks. Granted, we have attempted to bring some semblance of fiscal order to the economy; whereas the Greeks did little or nothing. However, the inescapable fact remains that we owe too much and will not be able to pay our debts.

We, like the Greeks, have developed a Socialist State founded on the nonsensical tenets laid out by Keynes (the Great Seducer). We are on the same path as them and just as ideologically hamstrung. Peonage beckons!

We must change our path and force the banks into liquidation. These banks must be let go. NAMA is the worst example of mal-investment by the State along the lines recommended by the Keynesian ideology.

The Free Market will immediately re-balance our economy once we take the shackles off. The key point is to de-regulate the economy and to tear up the Statute book. The Government must shrink away to a shadow of its former self and allow free people to recover their wealth and prospects by their own initiative. This does not mean anarchy as the Criminal Code still applies. The shrunken State can concentrate on protecting its citizenry with those taxes it collects. The most important steps involve establishing a sound money and an end to Socialist planning.

Socialism does not work. It enslaves people. We allowed ourselves get suckered by the Left (Keynesians) into believing this dead-end ideology and now we are reaping the whirlwind.

The Euro experiment is dead. The Germans have already stumped up E400billion on convergence and now need a mountain of cash too bail out the Greeks. If they attempt to sustain the Euro beyond its sell by date they risk destroying their own economy. The likelihood is they will keep at it until a neo fascist party gets control of one of the Landes parliaments. Then it will be all over. Ireland, like the rest of the PIIGS will be dumped out of the Euro leaving us to fend for ourselves.

Better we take the bull by the horns now and put everything we have into establishing a free market economy with our own honest currency.


“the cats out of the bag and the Germans are talking about a bailout though…”

Your faith in “the Germans” “bailing out” Greece is admirable.

Your understanding of German parish pump politics leaves me a breathless ignorant.


“allow free people to recover their wealth and prospects by their own initiative”


Tell me Mock, were do you get this shit from?


Sorry, I was a bit slow there.

“We know the Greeks are clueless on this issue.”

Thank God I’m not Greek.


U Mock to much.

The days of the banking cabal are over. This blow-out has destroyed them. It is their own fault. Bankers caused this debacle. You speculate on how to to preserve these parasitic institutions. I speculate on how they might eventually be destroyed.

It is not a given that we need a banking system based on fractional reserve lending in order to function as a successful economy. It is not a given that society needs to be Socialist either.

The Economies of the Western World have crashed. The banks are to blame.

Those who lived under Socialist regimes know about the terrors and privations that prevailed there.

I respectfully suggest that a major re-alignment of our economy and society is both necessary and inevitable following these changes. Savings the banks is the last thing we should be doing.

Given the latest comments from the Germans, my speculation on the likely spark that sets fire to the Euro may be somewhat speculative. There is still however, no good reason to believe that the currency will not alter dramatically in the next few months. There is simply too much debt dragging it down.


Fe*k off with your failed and dangerous ideology. It is a prime cause of the present global mess. Shrug it Off – AynRand addiction rehabilitation support groups on the dirt tracks around Merrion Square every hour on the hour ……. walk counterclockwise …. yes we know it is difficult to change the indoctrinated habits of a lifetime but we do have a duty of care and there are no fools as dangerous right now as fools such as you.

@ Robert

““We didn’t go off, again like Iceland, and nationalise the system OVERNIGHT” What he is saying is that he will do it.”

I have long argued there is a huge qualitiative AND quantitative differnece between overnight nationalisation at the peak of the crisis and creeping nationalisation after a period of stability and consolidation. This point gets lost on some people.

Yes, the quantitative difference is how much your clients have been able to squirrel out of the broken system since. And the term to the immediate right of that minus sign is the Exchequer.

The qualitative difference is that instead of having a clear and efficient response to the banking crisis, we have opaque confusion that reeks of crony capitalism. Meanwhile, the important markets (credit to SMEs and the property market) remain frozen in time, unable to see through the smokescreen created by the bumbling politicians.

If you were honest and read over your own Eoin Bond comments of last summer, you would admit NAMA has been a disasterous failure so far – in terms of what you stated it would achieve. We are nowhere and it is already Feb 2010.


I seem to be really upsetting you guys.

Let me remind you that the system that has failed is the one you have managed for the last sixty years.

Ayn Rand’s Objectivism at least acknowledges the role of Capitalism in the engendering of freedom.

Keynesians seek to regulate, to determine prices and wages and to achieve the fallacious notion of “equilibrium” within the economy. All Socialist claptrap leading us to hell in a handcart.

I am an Austrian, not a Randian. Her ideas on the economy were limited to extolling the virtues of “Laissez faire” She sought above all else to repudiate the Marxians.

While not one of her followers I commend her desire to free society from the moral degradation of Socialism. The connection between a failed ideology and a failed society has not clicked with you yet, it appears.

@ Graham

my clients? if i was honest? what i stated it would acheive last summer? Seriously Graham, you really need to get your facts in order, lest i decide to call you a lying tool.

– My clients: none of ’em buy Irish bank equity or bonds off me. They do buy Irish govt debt, which by your logic should have gone down in value on account of NAMA, but strangely has done the opposite.

– If i was honest: please, detail exactly where im not being honest. Or apologise. Your choice chief.

– what i stated it would achieve:

not entirely sure what you are accusing me of stating, so please be slightly more specific. I have vaguely referred to getting credit flowing again, but beyond that my major opinions have been around NAMA stabilising the banking sector and the state as a whole. I think i’ve been on the money on that. I’ve even openly admitted that NAMA will ultimately likely cost the state money. When i looked back over my comments over the summer, here’s the only notable ones i found:

“There is a far bigger chance of a loss at the end of NAMA, and a very real chance that that loss will be a huge one.
As such, the real question is whether the boost to the economy from clearing the banks’ balance sheets and restoring the flow of credit will outweigh the nominal loss that may eventually come from NAMA. For many, this question has yet to be convincingly answered by the government.”

“i would think its reasonable to assume that 3 or 4 of the nations largest banks going bust would have had some material effect on lending into the economy, but of course some people like to ignore this sort of thing…”

“I’m not saying we should be in any way happy about NAMA now being the ‘last, best hope’, or that there isn’t going to be a grizzly tab left for the taxpayer at the end of it all, but i really do shudder to think what’ll happen if it doesnt go through. Sometimes we have to accept the realities of the situation we are in.”

As i said above Graham, please list exactly what it is your are suggesting that i have stated or lied about, please show me where i have been wrong, and please detail exactly how NAMA has been a disasterous failure in light of my comments made last summer. Seriously Graham, given that you accused me of being vague yesterday, could you provide a bit of detail yourself please?

I’m just a teency bit concerned that the Greeks will suck up the spare cash so when we need a dig out in May there’ll be none left. They got there first, damn them.


Ah Sarah, that would be a good thing.

Wouldnt it be much better to have government checks bounce followed by a few months of rioting and a few dead bankers in 2010 than generations of debt slavery for everyone, just to keep the bankers and politicial classes in clover…. F them!

@Sarah Carey “They got there first, damn them. ”

Did they though? I’m told of lots of private jets with Spanish id’s going back and forth to Germany and France since Christmas. I’m also told there’s a lot of shouting, finger pointing and table thumping going on in Brussels this morning.

I wonder if this afternoons (or possibly evening) announcement might be wider than just Greece and its ouzo crisis? Only time will tell.

I also suspect that Faisal Islam on C4 is onto a big story/scoop. There’s something about his demeanour yesterday…………. gut feel.

Far be it for me to say i told u all so…



Nervy, nasty response. Light again on content.

Lying tool?

Ouch. That’s uncalled for and cheapens your comment. But at least you started to say please.

Specifically, you said things like (Oct 7)

NAMA, by paying LTEV, would repay the taxpayer in the form of “a banking system that is not declared insolvent and which should be able to be operated as a going concern going forward. This has follow on positive effects for the State funding requirements. It also buys the entire state and its population more time to suffer the inevitable adjustment in wages, asset prices and government spending which we are due to encounter shortly.”

How is this coming to pass now? It’s not. Banks will require recapitalisation in order to achieve solvency. That recapitalisation will occur at NAMA inflated share prices and after creeping bond deals that let the creditors off the hook.

Listen, Eoin, I may be mistaken. But to call me a lying tool is uncalled for. You owe ME an apology.

@ Graham

first really obvious point: “comments of last summer” does not match with a single comment on Oct 7th. This isn’t an issue of semantics, im only pointing out that you are suddenly changing a very broad sweeping statement about my general opinions, into a single comment outside the period of reference. Its impossible for me to defend myself when you won’t reference what i have said. Indeed, your inability to source anything “last summer” would make me think you are actually making this up as you go along. Is your assertion now that “at some stage over the last year of posting on here you got something wrong”? If so, then you have found me out – i do NOT in fact have the powers of papal infalability…

That said, however, and more specifically, what exactly is incorrect with what i said on Oct 7th and you have posted above? Please identify what exactly “is not going to come to pass”.

Banking sector still a going concern – check.
Positive effects for state funding req’s – check.
Buy the state time to suffer the inevitable adjustment in wages, asset prices and government spending – check, check, and check.

I never said there wouldn’t be additional recapitalisation required (though i hoped much of it would be private sector sourced). What i differentiated from was the liquidation that many people were suggesting take place with the Irish banks, or the chaos that overnight nationalisation might bring to the financial system. I have rarely, if ever, commented on recapitalisation of the flow of credit, almost always referring to bank and sovereign funding and stability of the banking and financial systems. Indeed, i finished off the exert you have selected with the following:

“As i have previously commented, i view the LTEV as a very large subsidy to the banking sector, but one which is justifiable given the economic and funding realities of Ireland at the present time. I am also very much in favour of an increased subordinated bond element to NAMA, and am very much a proponent of a special taxation policy for the banks going forward in order to recoup any losses resulting from NAMA.”

Again, i call on you to show exactly where i have been incorrect with regard to NAMA and my comments “in terms of what you stated it would achieve” and how NAMA has been a “disasterous failure” v-a-v these comments.

I apologise if you think im being rude or snarky, but to issue a very very broad based comment about me, my imaginery “squirreling” clients, and what i am alleged to have said, without any form of reference or citation, is both unfair, insulting, and worthy of rebuke. As i said, prove all of it or retract.

@ Graham

at various stages in recent months on here i have been accused of being stupid, blind, deliberately misleading, prejudiced against immigrants, a member of the establishment lobby, of having links with political parties, of personally gaining from the LTEV-overpaying of Irish bank assets, of having clients who are “squirreling away” the gains on Irish bank securities resulting from NAMA, and now of being wrong & not being honest about the actual outcomes of my previous comments. At various stages i have asked for people to back these claims up. At no stage has anyone ever supplied anything more than their own opinion or take on things, as opposed to factual evidence. To be honest, i’ve just had enough of it, and though no personal offence was intended against you, i aint gonna put up with it.


Okay, I never called you stupid, blind, prejudiced against immigrant. I am sorry if I called your clients squirrels. And I disagree with those commentators who show you disrespect.

For the record, I enjoy your comments and respect your views.

I too apologise if my comments – which were designed to be on issue – appeared to impugned your integrity. The “if you were honest” was a rhetorical device.


Now that detente has broken out – and well done to both of you (+ Graham Stull) – do you know anyone who might take those nationalised Icelandic bank shares in West Ham United off the hands of the Hammers? The Board needs the cash to buy Oliver Vandt as The striker to create havoc in premiership defenses …………

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