I think we need to lift our eyes from the minutiae of this, unfortunately on-going, bank system resolution exercise, but, of course without losing sight of the risks and costs to which citizens are being exposed – which Brian Lucey has highlighted in his usual pungent style in today’s IT: http://www.irishtimes.com/newspaper/opinion/2010/0401/1224267465785.html
I believe a strong case may been made to suggest that the Government has been, and is, engaged in an attempt to re-position Ireland strategically within the EU. This is not the result of some surge of wisdom in the corridors of powers; it is more a case of necessity being the mother of invention. This op-ed piece in today’s UK Guardian: http://www.guardian.co.uk/commentisfree/2010/mar/31/germany-europe-unity-self-interest
describes the fundamental strategic, economic and political changes that are taking place in Europe.
There are two dimensions to this that occasionally conflict. At the executive and administrative level the Commission remains wedded to the concept of ever closer union. But the dominant powers within the council, in particular, Germany, are moving towards a two-speed Europe. Geography is not a key criterion; “political temperment” is, perhaps, more important. The dividing line is the willingness and ability to join the German-centred core that will have the economic and political heft to go toe-to-toe with the US, China and the other BRICs.
On the surface the Commission will work hard to keep the PIIGS within the club, but the political will of the core countries is not behind this unless the PIIGS show evidence of willingly accepting the required discipline. This will be a “coalition of the willing” and it appears the Government has gotten the message.
By dealing with the current crises in close co-operation with the Commission and the ECB (as indicated by the Minister) – and accepting the necessary pain – Ireland is signalling a clear desire to be part of the German-centred core – and differentiating itself starkly from the other PIIGS.
I would be interested in views on whether or not this is the correct economic and strageic path for Ireland.
Remember that many banks have been closed in the US, with widespread losses. Yet investors still buy Treasuries, even non resident investors.
Lesson – looking after the interests of the taxpayer reinforces sovereign credit.
Europe still has to see a significant bank closure, and I even can’t think of an insignificant one offhand. Yet it has been the European Commission’s responsibility to ensure a level playing field. That would have helped protect the interests of the taxpayer.
It has been the ECB’s responsibility to ensure reasonable management of its collateral exposure. That also would have helped protect the interests of the taxpayer.
This is an extraordinary mendacious interview
“He makes a point that tends to be overlooked in discussions of whether more should have been done sooner. It could not have been done 12 months ago, with the financial markets fretting over the scale of the budget deficit.”
Yeah, Brian. Sure the deficit is much much better now than it was last year.
“if Anglo were to default, the €24bn it has borrowed from the European Central Bank would be at risk. Embarrassing, to say the least.
“We have to give Mr Trichet his money back,” Mr Lenihan grins.”
Clearly the statement here can be read only as : the repos (note, repos are short to medium term liquidity instruments Brian) are backed by utter trash. Otherwise the asset backing would cover them, wouldnt it? Wouldnt it?
“The €2.6bn for Irish Nationwide will have to be spent to cover its savers’ deposits, before that sorry mess disappears from the high streets. But, hey, aren’t we borrowing €19bn a year anyway?”
Whats another couple of Billion sure Brendan… How many chapters of Colm McCarthys reports is INBS worth?
“closing Anglo without defaulting would cost €70bn, he says — that figure being the difference between the cost of paying back Mr Trichet, other depositors and secured creditors, and the pitiful amounts the bank could raise by selling its loans and assets”
Now, this is not true. There, I said it. A terminogical inexactitude. A smaller, uglier word comes to mind.
Here is the meat of my argument more elaborated on in the indo http://www.independent.ie/business/keeping-it-alive-will-cost-an-arm-and-a-leg-with-any-upside-hard-to-ascertain-2120306.html
“In terms of liabilities, it has some €16bn deposits from banks and €23bn from the ECB and the Central Bank of Ireland. This €23bn is secured on assets. It has €28bn of customer deposits, and €13bn senior debt. Even after NAMA it will retain loans to customers of €30bn, funds on deposit with other banks of €7bn and around the same in bonds and other financial assets. Anglo can be wound up cheaply — here’s how. Sell the €28bn deposit book.
This is a regular event in banking, and even if it has to take a discount of 25pc that would yield €21bn. Sell the bonds and withdraw deposits in other banks. This gives a further €14bn, a total of €35bn, that is sufficient to cover the senior bondholders (€13bn) and the interbank deposits with NAMA (€16bn), with €6bn left over.
The €6bn can be used to pay off the ECB and the Central Bank, in part, with the remaining €17bn borrowings from these institutions secured on the remaining lending by Anglo.”
@ Brian Lucey
Re: the €70bn claim
Are you
* Calling Brian Lenihan a liar?
* Or just, incompetent?
🙂
@Brian Lucey,
“..with the remaining €17bn borrowings from these institutions secured on the remaining lending by Anglo.”
Are the CB and the ECB legally empowered to convert these short to medium term liquidity instruments into instruments financing long-term, illiquid – and possibly, very dodgy – assets?
@LondonReader
Im saying I dont think that that figure is correct. Nor the other blizzard of LARGE , LARGE I TELLS YA, LARGE scare-the-punter numbers that are flung arund with gay abandon.
Look – it cant cost 70/85ths to close anglo, goddam it even anglo assets have some worth.
As for the dichotomy you pose….I couldnt possibly say
@Brian Lucey
The joys of libel law… though I suspect the wigs at the 4 Courts would love to defend any professor that helps… reduce their long-term tax bill.
“minister takes critic to court” would look great in the FT wouldnt it….
I wonder if Lenihan would accept €1 and transfer of liabilities for his “stakes” in Anglo, INB, or EBS?
Surely it’s worth asking KKR, Blackstone, Santander, LoneStar, etc to do the due diligence.
@ Brian Lucey
Wasn’t it Milton Friedman who came up with the idea of “auctions” as ways to reduce govt costs. Like how different companies “bid” for the rail subsidies in the UK?
Doing the same with Anglo could save billions, no? Lenihan could offer a subordinate equity investment of €10bn to the highest bidder for Anglo. If LoneStar bid €7 bn beating a Santander’s €4bn, then Irish taxpayer forks out only €3bn of the current estimated €10bn. And the taxpayer has equity upside long-term.
Genius or folly?
@London_Reader
Yeah, thats fine for me. Whatever works.
@Brian, but also general comment.
Like many of the contributors on this board, I’ve been on the record suggesting that the whole thing smells rather fishy, to put it mildly.
I read this morning’s Lenihan interview with significant and increasing annoyance. The sophistry and obfuscation has – if anything – increased and become more brazen. Even if what he’s saying is true, and like Brian Lucey I struggle to believe so, then he’s not explaining very well why I’m on the hook for such large amounts of money.
Even at this stage it’s still important that pressure be kept on the government to demonstrate that what they are doing is actually in the common good. To keep pressing that they need to show us the numbers that support their statements rather than simply continuing to assert that they did the right thing. “Show me don’t tell me” should be the motto.
It needs to become the absolute expectation from all sides that unless there is full transparency on what happened all through 2008, 2009 and 2010 that the public is entitled to assume that Lenihan, Cowen, Gormley, et al are deliberately, and with malice aforethought, defrauding the Irish people. Some of them might actually dream of having continued political careers, and clarifying that they’re not liars and thieves should surely be something they want to do to continue to receive mandate for public office.
Ultimately it’s in their hands to clarify that they have actually been acting in the public interest and not otherwise, but the pressure of “Show me” needs to be maintained and strengthened.
Show me the numbers.
Show me the books.
Show me the balance sheets over time, both what was thought at the time and what turned out to have been the case.
Show me the minutes of meetings.
Write down the “verbal advice” that was given.
They need to show me…..because if they don’t I have little choice except to continue to suspect that they’re all liars and thieves.
AFAIK under the new laws under consideration, if they broke into my house and stole money I’d be entitled to shoot them. If they’re going to take future education and food and clothes and wealth from me and my kids then they need to clarify that they’re not effectively stealing the money.
Meantime, God help me, the only politicians on TV saying things that appeal to my indignation are economic remedials like the Labour Party and (ehem) Joe Higgins. Now that’s really scary!
@Brian
“Sell the €28bn deposit book.”
That sounds like a bit of magic to me – how does it work?
@BL
I know this may be Finance 101 but you and your colleagues are remarkably generous to those of us who are interested.
Why would you need to sell the deposit book at a discount?
Is it because of the over the odds interest rate that Anglo has to pay to retain these deposits?
Is Anglo paying more for deposits than we as taxpayers whould pay if we borrowed the money on the same maturity?
Paul Hunt
You are correct
The strategy is also the best one, given the stupidity of previous policies. It is also somewhat high risk, obviously. The NAMA part is particularly expensive and may prevent us from borrowing as freely as we might wish. We should allow the banks to fail, but this might anger some of those behind the faster strategy. However, either we live with capitalism or we do not. Socializing the losses is mercantilism, and the cost will be recovered by massive increases in taxation, far above that which would be otherwise becessary. We all agree that tax is a necessary evil?
@Ciaran O’Hagan,
I think you may accept that there are fundamental differences between the US and the “Rhineland” models of capitalism – and the differences have been starkly demonstrated in the respective responses to the financial and economic crises. In the US there are strong constitutional and judicial provisions against “taking without due process”, but takings are made once due process is observed. Therefore, procedures, such as those of the FDIC, are applied and banks are closed or taken over when the relevant agencies are legally empowered, subject to judicial oversight, and it is in the public interest to do so.
In the EU citizens qua citizens (a focus on taxpayers seems to exclude implicitly a number of citizens) are at the bottom of the food chain. In times of crisis, when the necessary legal procedures are not in place – or are not deemed adequate, the dominant national governments, who enjoy executive dominance, literally make up the rules as they go along to protect the elite and insiders. To a considerable extent the EU administrative and executive bodies, such as the Commission and the ECB, may be bent to the will of these same national governments operating in concert via the Council. The docility of the “outsiders” is bought via social transfers.
Ireland, having flirted with the Boston model – and having indulged in a binge – must now pay a heavy price to rejoin the Berlin club. And this price will fall on citizens as part of the implicit bargain is that national governments retain the sovereignty to protect those of the elites and insiders they choose.
I agree with the analysis of Brian Lucey et al that it would be far better to recognise the losses, take the pain and get over it, but this is at odds with the project the Government is pursuing (and which the Minister implicitly concedes in his interview) with the apparent full support of the EU institutions. The EU’s democratic deficit is simply the sum of all the national deficits in each of the EU’s parliamentary democracies.
Claiming that it would cost €70bn to close down Anglo is a complete untruth.
The minister knows this but yet repeats it again and again.
I’m sorry but if someone repeats something that they know to be untrue then they are hiding something.
@Ciaran: +1
These critical paragraphs do not hang together well. However the level of importance the Government is putting on protecting domestic bondholders is illustrated. Who are these “ourselves” we would be defaulting on? I think we are entitled to know. One hopes there has been a study (even if it must of necessity be secret) which details the effect of default on such domestic creditors.
“I am firmly of the view that Ireland cannot contemplate a default. The priority in all of this is to protect the ‘sovereign’ (market jargon for government debt).
“I say that because half the funding for Irish business comes from foreign loans, and 80pc of government debt. I don’t believe you can default on bank debt and not affect the sovereign.”
He sees this as the difference with Iceland, where nearly all the debt was owed to foreigners. “If we defaulted, half of the default would be on ourselves, with incalculable effects on jobs and credit.”
Another saccharine interview with a government minister. Unsurprising.
Each time a liquidation figure is floated for Anglo some kind of propaganda Gestetner machine is cranked up in the lugubrious basement of government offices spitting out A4 sheets tattooed in anxiety and dread. It’s the same machine that kicked in when the Insurance Corporation of Ireland had to be saved and PMPA before that, and so on. The messages are then delivered somberly by an army of political basilisks prepared to shrive criticism at a moment’s notice. There’s a scene in ‘Bruno’ where Bruno is filmed sitting on and eating off the backs of workers less fortunate than himself. My back has been killing me for the past year and a half and the pain is getting worse.
No one in that part of official Ireland enveloped in NAMA is interested in the truth to the slightest degree. Look at the symbiotic organism known once as the Irish financial system. If a can opener was taken to that entity, the body politic could easily be devoured by the worms.
What matters most to the elite, is the presentation of a version of events that will hold water. Hence the round robin of obfuscations about figures, debts, LTVs and timescales for this that and the other. One last recourse is to deluge Almunia and Olli Rehn with complaints and concerns about the current programme. Since the government can;t hear over teh roar of the Gestetner, what else is left?
@Zhou,
We have our own “No bondholder left behind” policy. It is entirely consistent with the overarching Government strategy I’ve being trying to outline. A few of the elite who behaved particularly egregiously will be hung out to dry to appease the desire of the great unwashed for some retribution, but for those who remain ensconced it will be business as usual.
When will we wake up and smell the coffee?
Been thinking about the bondholders question!
Rather than trying and failing to find out on the Anglo end.
Does it make sense to chance the other end of it by positing who they may be and investigate from there.
Church, at diocese or parish level?
City and county councils?
Credit unions, etc
Funds based in the country, etc
Anyone else in the less visible spectrum of light??
Would it be worth kicking tyres from this end?
Hugh Sheehy’s point re: releasing the documents is correct, however the disconnect between Govt. and the Oireachtas is now complete. The Oireachtas has no wish to force oversight on the Govt and indeed has supinely agreed to this in the NAMA legislation, accepting the “commercial sensitivity” argument without demur. Miriam Lord highlights this today in the IT: http://www.irishtimes.com/newspaper/ireland/2010/0401/1224267475612.html
No need to wake up to smell the coffee, wake up and smell the gasoline!
Mr Keenan says
“For Mr Lenihan, the priority over all else is that Ireland will not default.
Economists may ask why not, but governments think differently.”
Which economists are suggesting sovereign default as a good idea? I don’t think even McWilliams is suggesting this. So this seems just to be gratuitous swipe at economists who disagree with Minister on other matters.
“The scale of the Anglo losses makes it necessary to devise ways to keep costs off the Exchequer while Mr Lenihan wrestles with the budget deficit itself. The “promissory notes” mean the bank may call on the taxpayer for its losses over 10-15 years. ”
I never cease to be amazed at the journalistic obsession with what does or doesn’t count for some definition of the budget deficit. We’re supposed to celebrate that promissory notes somehow “keep costs off the Exchequer”? How in god’s name do they do that?
Why oh why do we have to put up with this rubbish?
@ Karl
Dont forget Ned O Keefe is on the war path too!
Time to get out of Dodge
When one is defending the indefensible, everything is expressed in extremes. Anyone who suggests that bondholders might share some of the losses being visited upon citizens is immediately accused of advocating a sovereign default.
@Ciaran O’Hagan,
Good comment. If you were to listen to Government politians on Irish media, you’d hear them constantly refer to bank debt as though it is sovereign debt.
Do the foreign investment community have a view on Irish financials buying Irish debt?
Although Anglo’s annual report doesn’t identify which government’s debt, their assets for sale include:
“Additions to the AFS portfolio during the financial period include €1.5bn of government bond purchases and €0.9bn of debt securities issued by financial institutions.(page 86)”
I don’t see why a bank under such distress should be growing anything. Hopefully the debt securities don’t relate to the successful non-guaranteed debt issues from AIB and BOI late last year.
The Minister does not appear to me to have been talking specifically about Anglo, and may not have been talking specifically about bonds at all, when he talked about half of a default being on us. He may simply have been talking about all the liabilities of Irish credit institutions, of which 44.8% were owed to Irish residents as of February 2010. (Table C3, Central Bank Monthly Statistics)
<strong34. Promissory Note
“A promissory note to be provided by the Minister to a credit institution providing for periodic payments by the Minister to the credit institution, and which will constitute Core Tier 1 capital of the Credit Institution at the time of issue of
the note.”
Where is the Money Bill that authorised the Minister to commit the State to these promises?
Or to put it another way.
Show me the Money (Bill).
The Minister does not have the right to spend the State’s Treasure as he sees fit.
That’s why Articles 21 & 22 were written into the Constitution.
Article 22 Section 2 Subsection 1
2. 1° The Chairman of Dáil Éireann shall certify any Bill which, in his opinion, is a Money Bill to be a Money Bill, and his certificate shall, subject to the subsequent provisions of this section, be final and conclusive.
Did the Chairman of the Dáil certify any bill giving the Minister authority to write promissory notes on behalf of the State?
Show me the Money (Bill).
@BL,
Two contributors have queried your numbers on selling the deposit book for 21bn. Yet you repeat it again w/o clarifiying your position.
@JL
Errr. where do I repeat it?
Anyhow, im off for two weeks (family issues) so let the debate continue.
@Paul Hunt
Yes – this is the strategy – I’m on side of Berlin ………. (but)
@ Ciaran O’Hagan
Yes … playing sensible hard-ball with reckless fools will do us not harm at all, at all, at all – in Frankfurt or Berlin or in Paris with Ms Lagarde.
In fact, backbone of slime eel capitulation gets us no Kudus with Berlin/Paris or with Chancellor Merkel or Minister Lagarde …..
… astuteness as we swim in a sea of obfuscatory spin, lies and damn lies, is welcome …
@Ciaran O’Hagan
Getting worried yet?
Moving to a sell recommendation?
We’ve passed the 90% debt level (if you count NAMA… and I’m pretty sure you and everyone else can add two numbers together). The taxpayer is being manoeuvred into a position where the black economy is the only way he can pay his bank bills. Many are already there. This does not bode well for bond repayments…
Re. bonds/senior debt/default
1. The bond holders have accepted interest on their investments. Interest is the price of risk. By accepting the interest they have evaluated and accepted the risk. I think I have market theory OK there.
2. We are being told that a default will lead to higher government borrowing costs, or that funds would dry up alltogether. Let’s put that into a topical context.
The Grand National is a long race, over a lot of fences, over heavy ground. If you slip few more pounds handicap weight under the saddle of some unfortunate nag, is he/she more likely to come to grief or are his chances of finishing the course enhanced. Without the deadweight we will be more likely to survive he course – sovereign borrowing rates will fall. Money has neither memory nor morals – it goes where a return is most likely
@Paul Hunt
“In the EU citizens qua citizens ….. are at the bottom of the food chain. In times of crisis, when the necessary legal procedures are not in place – or are not deemed adequate, the dominant national governments (in particular Germany) , who enjoy executive dominance, literally make up the rules as they go along to protect the elite and insiders.”
You have hit the nail on the head. This is the realpolitik of the bailout of all banks (including Anglo-Irish Bank) as seen by the permanent governing party -Fianna Fail.
Fianna Fail/PD governments for over 20 years have bought into Trickle-Down Economics which gives the corporate elites all the backing they ask for in exchange for jobs (regular jobs and “jobs for the boys”),good tax returns and election winning conditions . That seemed to work quite well up to the turn of the century.
Then it all went crazy. Light touch regulation ,mixed with an abundance of available international finance and a “Greed is Good” culture was the perfect recipe for the mother of all speculative booms, financed largely through our own banks. But of course Irish Banks did not have the money for this boom. They borrowed it on the international bond markets – took their bonuses while the going was good for those 2-3 boom time years – and now a Fianna Fail government has committed Irish citizens to repay this debt over the next 20-30 years.
I am inclined to believe that the Fianna Fail government (and its advisers) believes that it has no alternative but to do as it is told by bondholders (Who are they?) and by the dominant national governments in the EU (Probably Germany, the UK and France). At this stage they are not capable of changing their economic or political thinking on this issue – and they are totally compromised by their own part in the stoking of the property boom.
The banking resolution policy of this government is set in stone. It will not be changed until there is a change of government.
Paul, David O’Donnell – well said.
Yoganmahew – no not yet.
Ahura – such purchases occur elsewhere too
Al – I don’t think anyone has precise info. You have a fair idea early on in a bond’s life, but then the bonds blow like leaves in the wind.
.
.
I’m sure you are all delighted to know that bank bonds (guaranteed, covered, senior…) have been performing well this week. Even Irish government bonds have been doing well. So the Minister’s reassurances are working like a charm.
@Ciaran
“So the Minister’s reassurances are working like a charm.”
More to the point, the ratings agencies are impressed, no? As long as Ireland maintains its rating, nobody can be accused of having bought something duff. As long as the state retains its rating, the guaranteed debt will too.
Mind you, something along the lines of NAMA is what was suggested by the ratings agencies, so they have to say that it looks great. Otherwise they look like incompetents. Again. And we couldn’t have that, could we? Again!
“I’m sure you are all delighted to know”
Yup. As long as it doesn’t mean that people start to believe in the infinite debt probability drive… I can’t stand the bowls of petunias crashing to earth.
@ Ciaran, Yoga
I suppose we dont have to be good, We only have to be better!!
Two guys in the woods spot a brown bear running towards them….
First guy screams, and looks to his friend who is putting on a pair of runners. “We cant out run the beast”…..
You know the rest
Night!
@ Graham Williams
“Interest is the price of risk.”
A clarification.
Interest paid above the risk free rate represents a risk premium over the Sovereign.
It is generally accepted that the Sovereign is risk free as it has access to a tax revenue stream which it can manipulate to service debt. And If the State finds that it can tax no more it can reduce expenditure to service debt or sell the assets of the State.
I think that is important because it is precisely what Grianna Fail are doing.
They are surrendering tax revenues, or if you wish reducing the quantum of services provided by the State (Health, Dental, Cancer Services, Schools, Roads, Water, Pensions, Unemployment Assistance and not doubt other things). The quality and efficiency of services is another matter. And if all that fails they will sell. Including their souls.
But let’s be clear, Grianna Fail are condemning the Citizens to a lower quality of life and in some cases are condemning the Citizen to death.
And they are doing this because of fear (they don’t have the courage to take the decisions necessary to protect the Citizen) or greed (they want the Citizen rather than self and connected “class”) to suffer so that they should not suffer.
Grand National:
Your analogy is, I think, about the simplest way to understand this.
There can be no doubt that when the Sovereign is burdened by the weight of dead capital it becomes less attractive to those who would offer credit in the long run.
In the short run ratings agencies can be persuaded to provide what is necessary.
They will change their tune when the money is gone.
@ yoganmahew
“As long as Ireland maintains its rating, nobody can be accused of having bought something duff.”
Rating debt used to mean something to credit committees.
Now credit committees know that ratings can be bought.
Ratings have become yet another commodity.
Everything is for sale.
@ yoganmahew
Everything is for sale.
The IMF are already here.
The Citizen has not been informed.
I call it A39.
“Treason shall consist only in levying war against the State, or assisting any State or person or inciting or conspiring with any person to levy war against the State, or attempting by force of arms or other violent means to overthrow the organs of government established by this Constitution, or taking part or being concerned in or inciting or conspiring with any person to make or to take part or be concerned in any such attempt.”
Everything is for sale. Including Sovereignty.
I didn’t write that someone else did. But every time I vote in a Constitutional referendum I affirm that A39 and all other Articles of the Constitution are extant until such time as the Citizen decides otherwise.
If the price to be paid for Sovereignty is that “Bond Markets” cut off the supply of debt that they would have us consume then so be it.
I would rather the freedom to accept a written Constitution and the freedom of the Citizen to amend that Constitution.
If Grianna Fail are in the justified and ancient business of selling everyone else out for their own gain then so be it.
They can make this Nation a pauper.
But they need to remember the Constituted Will of the Citizen is Law.
Worrying me that Ned_een might have been on to something:
“We are in danger of viewing Ireland as having a problem we cannot surmount, but that is not the case. Those advocating default would put us in the position of Iceland or Argentina and that would leave us with insurmountable problems,” [ Minister Lenihan] told The Irish Times .“People are perfectly entitled to be angry at the reckless lending of the bankers. I understand that, but Ireland is not Argentina and we can’t go around repudiating our debts,” he added. He said the cost of dealing with Anglo would be “averaged over a number of years and while the borrowing cost will be substantial, it is a sustainable cost”. … “The markets are saying that this is a credible plan … “Nama has proved its virility and the Nama management have got off to a flying start,” he said.
Minor point: text from New York – Blind Biddy not coming back.
@ David O’Donnell
It is a terrible time when Citizen is left with nothing other than to quote the Constitution verbatim.
Do they know how far they have strayed?
@ David O’Donnell
When you say that Blind Biddy is “not coming back” am I to assume that she has found New York more suitable to her condition, or, and God save us from all harm, that the Borg Eye Socket Implant didn’t take and that she is, how can one put this, “not coming back”.
If the former, she is now in the city of the blind greed. She will fell right at home. The blind don’t know greed though they see it. Not accusing Blind Biddy of greed of course.
If the latter, she is as blind as the rest of us.
God Rest Biddy
@ David O’Donnell
The Constitution is being torn to shreads.
And the President is doing nothing about it.
@Greg
The constitution is ignored – the logic of republic is reversed – and they’re spinning BS goodO to the serfs. By far the worst was the image of Sheeply Shopping on Oireachtas Live on Tuesday night as 83 calmly signed the nation into serfhood as they chuckled to each other while children yet unborn were chained by the spineless whims of GriannaFall. Treason is the only word that comes near.
Blind Biddy has not had the Op. – Swears she will not set foot in the place again while her favourite – Minister Mary – remains in office. “Gimme back the bit o me blind pension dat de sthole an I’ll think about it – the **77^^%%%$$$££***&^ etc she said on the phone.
@All
I’m off to the Cathedral – The Bull is still off the pints, Drico will have a well earned few in the pews, Seven_of_Nine is back, Blind Biddy is organizing the brigade of the blind, the blog is now ‘in’ time, and the serfs will strike back!
@David O’Donnell
At the risk of evoking pathos, both Iceland and Ireland score highly in the OECD Education at a Glance stats for knowledge economy indicators – number of graduates, number of first class degrees, etc.
Also while Ned O’Keefe’s intervention has raised eyebrows, bear in mind that his agri business – pig production – is outside CAP and not subsidized. Irish pork is traded at world market prices. Anyone keeping a non-CAP reliant business afloat deserves some credit. Small point.
@ The Alchemist
Good advice and I for one will take it and continue to badger the EU competition authority. At least they are polite and I think without them it would already have been a bigger slam dunk imposed on us. The rool-over of our debt is going to be where the rubber hits the road.
@Robert Browne
“EU competition authority. At least they are polite and I think without them it would already have been a bigger slam dunk imposed on us.”
I too made a submission to the Competition Task Force about the treatment of rolled up interest in Nama’s business plan http://www.planware.org/briansblog/2009/10/nama—the-real-default-rate.html#more
and got a fulsome acknowledgement within a week or so. It took the Dept of Finance 2.5 months to respond (after a reminder) with a totally irrelevant reply.
This interview seems to have been written by Jody Corcoran rather than the normally sensible Brendan Keenan.
@ Ciarán O’Hagan,
“such purchases occur elsewhere too”
Of course they do. It’s the extent to which this is happening. It’s all a little too circular. Irish banks buy gov bonds, gov guarantees the funds supporting the bonds. At a certain point, it could start to look a little Enron-esque.
54 replies on “Interview with Brian Lenihan”
I think we need to lift our eyes from the minutiae of this, unfortunately on-going, bank system resolution exercise, but, of course without losing sight of the risks and costs to which citizens are being exposed – which Brian Lucey has highlighted in his usual pungent style in today’s IT:
http://www.irishtimes.com/newspaper/opinion/2010/0401/1224267465785.html
I believe a strong case may been made to suggest that the Government has been, and is, engaged in an attempt to re-position Ireland strategically within the EU. This is not the result of some surge of wisdom in the corridors of powers; it is more a case of necessity being the mother of invention. This op-ed piece in today’s UK Guardian:
http://www.guardian.co.uk/commentisfree/2010/mar/31/germany-europe-unity-self-interest
describes the fundamental strategic, economic and political changes that are taking place in Europe.
There are two dimensions to this that occasionally conflict. At the executive and administrative level the Commission remains wedded to the concept of ever closer union. But the dominant powers within the council, in particular, Germany, are moving towards a two-speed Europe. Geography is not a key criterion; “political temperment” is, perhaps, more important. The dividing line is the willingness and ability to join the German-centred core that will have the economic and political heft to go toe-to-toe with the US, China and the other BRICs.
On the surface the Commission will work hard to keep the PIIGS within the club, but the political will of the core countries is not behind this unless the PIIGS show evidence of willingly accepting the required discipline. This will be a “coalition of the willing” and it appears the Government has gotten the message.
By dealing with the current crises in close co-operation with the Commission and the ECB (as indicated by the Minister) – and accepting the necessary pain – Ireland is signalling a clear desire to be part of the German-centred core – and differentiating itself starkly from the other PIIGS.
I would be interested in views on whether or not this is the correct economic and strageic path for Ireland.
Remember that many banks have been closed in the US, with widespread losses. Yet investors still buy Treasuries, even non resident investors.
Lesson – looking after the interests of the taxpayer reinforces sovereign credit.
Europe still has to see a significant bank closure, and I even can’t think of an insignificant one offhand. Yet it has been the European Commission’s responsibility to ensure a level playing field. That would have helped protect the interests of the taxpayer.
It has been the ECB’s responsibility to ensure reasonable management of its collateral exposure. That also would have helped protect the interests of the taxpayer.
This is an extraordinary mendacious interview
“He makes a point that tends to be overlooked in discussions of whether more should have been done sooner. It could not have been done 12 months ago, with the financial markets fretting over the scale of the budget deficit.”
Yeah, Brian. Sure the deficit is much much better now than it was last year.
“if Anglo were to default, the €24bn it has borrowed from the European Central Bank would be at risk. Embarrassing, to say the least.
“We have to give Mr Trichet his money back,” Mr Lenihan grins.”
Clearly the statement here can be read only as : the repos (note, repos are short to medium term liquidity instruments Brian) are backed by utter trash. Otherwise the asset backing would cover them, wouldnt it? Wouldnt it?
“The €2.6bn for Irish Nationwide will have to be spent to cover its savers’ deposits, before that sorry mess disappears from the high streets. But, hey, aren’t we borrowing €19bn a year anyway?”
Whats another couple of Billion sure Brendan… How many chapters of Colm McCarthys reports is INBS worth?
“closing Anglo without defaulting would cost €70bn, he says — that figure being the difference between the cost of paying back Mr Trichet, other depositors and secured creditors, and the pitiful amounts the bank could raise by selling its loans and assets”
Now, this is not true. There, I said it. A terminogical inexactitude. A smaller, uglier word comes to mind.
Here is the meat of my argument more elaborated on in the indo http://www.independent.ie/business/keeping-it-alive-will-cost-an-arm-and-a-leg-with-any-upside-hard-to-ascertain-2120306.html
“In terms of liabilities, it has some €16bn deposits from banks and €23bn from the ECB and the Central Bank of Ireland. This €23bn is secured on assets. It has €28bn of customer deposits, and €13bn senior debt. Even after NAMA it will retain loans to customers of €30bn, funds on deposit with other banks of €7bn and around the same in bonds and other financial assets. Anglo can be wound up cheaply — here’s how. Sell the €28bn deposit book.
This is a regular event in banking, and even if it has to take a discount of 25pc that would yield €21bn. Sell the bonds and withdraw deposits in other banks. This gives a further €14bn, a total of €35bn, that is sufficient to cover the senior bondholders (€13bn) and the interbank deposits with NAMA (€16bn), with €6bn left over.
The €6bn can be used to pay off the ECB and the Central Bank, in part, with the remaining €17bn borrowings from these institutions secured on the remaining lending by Anglo.”
@ Brian Lucey
Re: the €70bn claim
Are you
* Calling Brian Lenihan a liar?
* Or just, incompetent?
🙂
@Brian Lucey,
“..with the remaining €17bn borrowings from these institutions secured on the remaining lending by Anglo.”
Are the CB and the ECB legally empowered to convert these short to medium term liquidity instruments into instruments financing long-term, illiquid – and possibly, very dodgy – assets?
@LondonReader
Im saying I dont think that that figure is correct. Nor the other blizzard of LARGE , LARGE I TELLS YA, LARGE scare-the-punter numbers that are flung arund with gay abandon.
Look – it cant cost 70/85ths to close anglo, goddam it even anglo assets have some worth.
As for the dichotomy you pose….I couldnt possibly say
@Brian Lucey
The joys of libel law… though I suspect the wigs at the 4 Courts would love to defend any professor that helps… reduce their long-term tax bill.
“minister takes critic to court” would look great in the FT wouldnt it….
I wonder if Lenihan would accept €1 and transfer of liabilities for his “stakes” in Anglo, INB, or EBS?
Surely it’s worth asking KKR, Blackstone, Santander, LoneStar, etc to do the due diligence.
@ Brian Lucey
Wasn’t it Milton Friedman who came up with the idea of “auctions” as ways to reduce govt costs. Like how different companies “bid” for the rail subsidies in the UK?
Doing the same with Anglo could save billions, no? Lenihan could offer a subordinate equity investment of €10bn to the highest bidder for Anglo. If LoneStar bid €7 bn beating a Santander’s €4bn, then Irish taxpayer forks out only €3bn of the current estimated €10bn. And the taxpayer has equity upside long-term.
Genius or folly?
@London_Reader
Yeah, thats fine for me. Whatever works.
@Brian, but also general comment.
Like many of the contributors on this board, I’ve been on the record suggesting that the whole thing smells rather fishy, to put it mildly.
I read this morning’s Lenihan interview with significant and increasing annoyance. The sophistry and obfuscation has – if anything – increased and become more brazen. Even if what he’s saying is true, and like Brian Lucey I struggle to believe so, then he’s not explaining very well why I’m on the hook for such large amounts of money.
Even at this stage it’s still important that pressure be kept on the government to demonstrate that what they are doing is actually in the common good. To keep pressing that they need to show us the numbers that support their statements rather than simply continuing to assert that they did the right thing. “Show me don’t tell me” should be the motto.
It needs to become the absolute expectation from all sides that unless there is full transparency on what happened all through 2008, 2009 and 2010 that the public is entitled to assume that Lenihan, Cowen, Gormley, et al are deliberately, and with malice aforethought, defrauding the Irish people. Some of them might actually dream of having continued political careers, and clarifying that they’re not liars and thieves should surely be something they want to do to continue to receive mandate for public office.
Ultimately it’s in their hands to clarify that they have actually been acting in the public interest and not otherwise, but the pressure of “Show me” needs to be maintained and strengthened.
Show me the numbers.
Show me the books.
Show me the balance sheets over time, both what was thought at the time and what turned out to have been the case.
Show me the minutes of meetings.
Write down the “verbal advice” that was given.
They need to show me…..because if they don’t I have little choice except to continue to suspect that they’re all liars and thieves.
AFAIK under the new laws under consideration, if they broke into my house and stole money I’d be entitled to shoot them. If they’re going to take future education and food and clothes and wealth from me and my kids then they need to clarify that they’re not effectively stealing the money.
Meantime, God help me, the only politicians on TV saying things that appeal to my indignation are economic remedials like the Labour Party and (ehem) Joe Higgins. Now that’s really scary!
@Brian
“Sell the €28bn deposit book.”
That sounds like a bit of magic to me – how does it work?
@BL
I know this may be Finance 101 but you and your colleagues are remarkably generous to those of us who are interested.
Why would you need to sell the deposit book at a discount?
Is it because of the over the odds interest rate that Anglo has to pay to retain these deposits?
Is Anglo paying more for deposits than we as taxpayers whould pay if we borrowed the money on the same maturity?
Paul Hunt
You are correct
The strategy is also the best one, given the stupidity of previous policies. It is also somewhat high risk, obviously. The NAMA part is particularly expensive and may prevent us from borrowing as freely as we might wish. We should allow the banks to fail, but this might anger some of those behind the faster strategy. However, either we live with capitalism or we do not. Socializing the losses is mercantilism, and the cost will be recovered by massive increases in taxation, far above that which would be otherwise becessary. We all agree that tax is a necessary evil?
@Ciaran O’Hagan,
I think you may accept that there are fundamental differences between the US and the “Rhineland” models of capitalism – and the differences have been starkly demonstrated in the respective responses to the financial and economic crises. In the US there are strong constitutional and judicial provisions against “taking without due process”, but takings are made once due process is observed. Therefore, procedures, such as those of the FDIC, are applied and banks are closed or taken over when the relevant agencies are legally empowered, subject to judicial oversight, and it is in the public interest to do so.
In the EU citizens qua citizens (a focus on taxpayers seems to exclude implicitly a number of citizens) are at the bottom of the food chain. In times of crisis, when the necessary legal procedures are not in place – or are not deemed adequate, the dominant national governments, who enjoy executive dominance, literally make up the rules as they go along to protect the elite and insiders. To a considerable extent the EU administrative and executive bodies, such as the Commission and the ECB, may be bent to the will of these same national governments operating in concert via the Council. The docility of the “outsiders” is bought via social transfers.
Ireland, having flirted with the Boston model – and having indulged in a binge – must now pay a heavy price to rejoin the Berlin club. And this price will fall on citizens as part of the implicit bargain is that national governments retain the sovereignty to protect those of the elites and insiders they choose.
I agree with the analysis of Brian Lucey et al that it would be far better to recognise the losses, take the pain and get over it, but this is at odds with the project the Government is pursuing (and which the Minister implicitly concedes in his interview) with the apparent full support of the EU institutions. The EU’s democratic deficit is simply the sum of all the national deficits in each of the EU’s parliamentary democracies.
Claiming that it would cost €70bn to close down Anglo is a complete untruth.
The minister knows this but yet repeats it again and again.
I’m sorry but if someone repeats something that they know to be untrue then they are hiding something.
@Ciaran: +1
These critical paragraphs do not hang together well. However the level of importance the Government is putting on protecting domestic bondholders is illustrated. Who are these “ourselves” we would be defaulting on? I think we are entitled to know. One hopes there has been a study (even if it must of necessity be secret) which details the effect of default on such domestic creditors.
“I am firmly of the view that Ireland cannot contemplate a default. The priority in all of this is to protect the ‘sovereign’ (market jargon for government debt).
“I say that because half the funding for Irish business comes from foreign loans, and 80pc of government debt. I don’t believe you can default on bank debt and not affect the sovereign.”
He sees this as the difference with Iceland, where nearly all the debt was owed to foreigners. “If we defaulted, half of the default would be on ourselves, with incalculable effects on jobs and credit.”
Another saccharine interview with a government minister. Unsurprising.
Each time a liquidation figure is floated for Anglo some kind of propaganda Gestetner machine is cranked up in the lugubrious basement of government offices spitting out A4 sheets tattooed in anxiety and dread. It’s the same machine that kicked in when the Insurance Corporation of Ireland had to be saved and PMPA before that, and so on. The messages are then delivered somberly by an army of political basilisks prepared to shrive criticism at a moment’s notice. There’s a scene in ‘Bruno’ where Bruno is filmed sitting on and eating off the backs of workers less fortunate than himself. My back has been killing me for the past year and a half and the pain is getting worse.
No one in that part of official Ireland enveloped in NAMA is interested in the truth to the slightest degree. Look at the symbiotic organism known once as the Irish financial system. If a can opener was taken to that entity, the body politic could easily be devoured by the worms.
What matters most to the elite, is the presentation of a version of events that will hold water. Hence the round robin of obfuscations about figures, debts, LTVs and timescales for this that and the other. One last recourse is to deluge Almunia and Olli Rehn with complaints and concerns about the current programme. Since the government can;t hear over teh roar of the Gestetner, what else is left?
@Zhou,
We have our own “No bondholder left behind” policy. It is entirely consistent with the overarching Government strategy I’ve being trying to outline. A few of the elite who behaved particularly egregiously will be hung out to dry to appease the desire of the great unwashed for some retribution, but for those who remain ensconced it will be business as usual.
When will we wake up and smell the coffee?
Been thinking about the bondholders question!
Rather than trying and failing to find out on the Anglo end.
Does it make sense to chance the other end of it by positing who they may be and investigate from there.
Church, at diocese or parish level?
City and county councils?
Credit unions, etc
Funds based in the country, etc
Anyone else in the less visible spectrum of light??
Would it be worth kicking tyres from this end?
Hugh Sheehy’s point re: releasing the documents is correct, however the disconnect between Govt. and the Oireachtas is now complete. The Oireachtas has no wish to force oversight on the Govt and indeed has supinely agreed to this in the NAMA legislation, accepting the “commercial sensitivity” argument without demur. Miriam Lord highlights this today in the IT: http://www.irishtimes.com/newspaper/ireland/2010/0401/1224267475612.html
No need to wake up to smell the coffee, wake up and smell the gasoline!
Mr Keenan says
“For Mr Lenihan, the priority over all else is that Ireland will not default.
Economists may ask why not, but governments think differently.”
Which economists are suggesting sovereign default as a good idea? I don’t think even McWilliams is suggesting this. So this seems just to be gratuitous swipe at economists who disagree with Minister on other matters.
“The scale of the Anglo losses makes it necessary to devise ways to keep costs off the Exchequer while Mr Lenihan wrestles with the budget deficit itself. The “promissory notes” mean the bank may call on the taxpayer for its losses over 10-15 years. ”
I never cease to be amazed at the journalistic obsession with what does or doesn’t count for some definition of the budget deficit. We’re supposed to celebrate that promissory notes somehow “keep costs off the Exchequer”? How in god’s name do they do that?
Why oh why do we have to put up with this rubbish?
@ Karl
Dont forget Ned O Keefe is on the war path too!
Time to get out of Dodge
When one is defending the indefensible, everything is expressed in extremes. Anyone who suggests that bondholders might share some of the losses being visited upon citizens is immediately accused of advocating a sovereign default.
@Ciaran O’Hagan,
Good comment. If you were to listen to Government politians on Irish media, you’d hear them constantly refer to bank debt as though it is sovereign debt.
Do the foreign investment community have a view on Irish financials buying Irish debt?
Although Anglo’s annual report doesn’t identify which government’s debt, their assets for sale include:
“Additions to the AFS portfolio during the financial period include €1.5bn of government bond purchases and €0.9bn of debt securities issued by financial institutions.(page 86)”
I don’t see why a bank under such distress should be growing anything. Hopefully the debt securities don’t relate to the successful non-guaranteed debt issues from AIB and BOI late last year.
The Minister does not appear to me to have been talking specifically about Anglo, and may not have been talking specifically about bonds at all, when he talked about half of a default being on us. He may simply have been talking about all the liabilities of Irish credit institutions, of which 44.8% were owed to Irish residents as of February 2010. (Table C3, Central Bank Monthly Statistics)
<strong34. Promissory Note
“A promissory note to be provided by the Minister to a credit institution providing for periodic payments by the Minister to the credit institution, and which will constitute Core Tier 1 capital of the Credit Institution at the time of issue of
the note.”
http://www.finance.gov.ie/documents/speeches2010/spbl044supp.pdf (Page 70)
Where is the Money Bill that authorised the Minister to commit the State to these promises?
Or to put it another way.
Show me the Money (Bill).
The Minister does not have the right to spend the State’s Treasure as he sees fit.
That’s why Articles 21 & 22 were written into the Constitution.
Article 22 Section 2 Subsection 1
2. 1° The Chairman of Dáil Éireann shall certify any Bill which, in his opinion, is a Money Bill to be a Money Bill, and his certificate shall, subject to the subsequent provisions of this section, be final and conclusive.
Did the Chairman of the Dáil certify any bill giving the Minister authority to write promissory notes on behalf of the State?
Show me the Money (Bill).
@BL,
Two contributors have queried your numbers on selling the deposit book for 21bn. Yet you repeat it again w/o clarifiying your position.
@JL
Errr. where do I repeat it?
Anyhow, im off for two weeks (family issues) so let the debate continue.
@Paul Hunt
Yes – this is the strategy – I’m on side of Berlin ………. (but)
@ Ciaran O’Hagan
Yes … playing sensible hard-ball with reckless fools will do us not harm at all, at all, at all – in Frankfurt or Berlin or in Paris with Ms Lagarde.
In fact, backbone of slime eel capitulation gets us no Kudus with Berlin/Paris or with Chancellor Merkel or Minister Lagarde …..
… astuteness as we swim in a sea of obfuscatory spin, lies and damn lies, is welcome …
@Ciaran O’Hagan
Getting worried yet?
Moving to a sell recommendation?
We’ve passed the 90% debt level (if you count NAMA… and I’m pretty sure you and everyone else can add two numbers together). The taxpayer is being manoeuvred into a position where the black economy is the only way he can pay his bank bills. Many are already there. This does not bode well for bond repayments…
Re. bonds/senior debt/default
1. The bond holders have accepted interest on their investments. Interest is the price of risk. By accepting the interest they have evaluated and accepted the risk. I think I have market theory OK there.
2. We are being told that a default will lead to higher government borrowing costs, or that funds would dry up alltogether. Let’s put that into a topical context.
The Grand National is a long race, over a lot of fences, over heavy ground. If you slip few more pounds handicap weight under the saddle of some unfortunate nag, is he/she more likely to come to grief or are his chances of finishing the course enhanced. Without the deadweight we will be more likely to survive he course – sovereign borrowing rates will fall. Money has neither memory nor morals – it goes where a return is most likely
@Paul Hunt
“In the EU citizens qua citizens ….. are at the bottom of the food chain. In times of crisis, when the necessary legal procedures are not in place – or are not deemed adequate, the dominant national governments (in particular Germany) , who enjoy executive dominance, literally make up the rules as they go along to protect the elite and insiders.”
You have hit the nail on the head. This is the realpolitik of the bailout of all banks (including Anglo-Irish Bank) as seen by the permanent governing party -Fianna Fail.
Fianna Fail/PD governments for over 20 years have bought into Trickle-Down Economics which gives the corporate elites all the backing they ask for in exchange for jobs (regular jobs and “jobs for the boys”),good tax returns and election winning conditions . That seemed to work quite well up to the turn of the century.
Then it all went crazy. Light touch regulation ,mixed with an abundance of available international finance and a “Greed is Good” culture was the perfect recipe for the mother of all speculative booms, financed largely through our own banks. But of course Irish Banks did not have the money for this boom. They borrowed it on the international bond markets – took their bonuses while the going was good for those 2-3 boom time years – and now a Fianna Fail government has committed Irish citizens to repay this debt over the next 20-30 years.
I am inclined to believe that the Fianna Fail government (and its advisers) believes that it has no alternative but to do as it is told by bondholders (Who are they?) and by the dominant national governments in the EU (Probably Germany, the UK and France). At this stage they are not capable of changing their economic or political thinking on this issue – and they are totally compromised by their own part in the stoking of the property boom.
The banking resolution policy of this government is set in stone. It will not be changed until there is a change of government.
Paul, David O’Donnell – well said.
Yoganmahew – no not yet.
Ahura – such purchases occur elsewhere too
Al – I don’t think anyone has precise info. You have a fair idea early on in a bond’s life, but then the bonds blow like leaves in the wind.
.
.
I’m sure you are all delighted to know that bank bonds (guaranteed, covered, senior…) have been performing well this week. Even Irish government bonds have been doing well. So the Minister’s reassurances are working like a charm.
@Ciaran
“So the Minister’s reassurances are working like a charm.”
More to the point, the ratings agencies are impressed, no? As long as Ireland maintains its rating, nobody can be accused of having bought something duff. As long as the state retains its rating, the guaranteed debt will too.
Mind you, something along the lines of NAMA is what was suggested by the ratings agencies, so they have to say that it looks great. Otherwise they look like incompetents. Again. And we couldn’t have that, could we? Again!
“I’m sure you are all delighted to know”
Yup. As long as it doesn’t mean that people start to believe in the infinite debt probability drive… I can’t stand the bowls of petunias crashing to earth.
@ Ciaran, Yoga
I suppose we dont have to be good, We only have to be better!!
Two guys in the woods spot a brown bear running towards them….
First guy screams, and looks to his friend who is putting on a pair of runners. “We cant out run the beast”…..
You know the rest
Night!
@ Graham Williams
“Interest is the price of risk.”
A clarification.
Interest paid above the risk free rate represents a risk premium over the Sovereign.
It is generally accepted that the Sovereign is risk free as it has access to a tax revenue stream which it can manipulate to service debt. And If the State finds that it can tax no more it can reduce expenditure to service debt or sell the assets of the State.
I think that is important because it is precisely what Grianna Fail are doing.
They are surrendering tax revenues, or if you wish reducing the quantum of services provided by the State (Health, Dental, Cancer Services, Schools, Roads, Water, Pensions, Unemployment Assistance and not doubt other things). The quality and efficiency of services is another matter. And if all that fails they will sell. Including their souls.
But let’s be clear, Grianna Fail are condemning the Citizens to a lower quality of life and in some cases are condemning the Citizen to death.
And they are doing this because of fear (they don’t have the courage to take the decisions necessary to protect the Citizen) or greed (they want the Citizen rather than self and connected “class”) to suffer so that they should not suffer.
Grand National:
Your analogy is, I think, about the simplest way to understand this.
There can be no doubt that when the Sovereign is burdened by the weight of dead capital it becomes less attractive to those who would offer credit in the long run.
In the short run ratings agencies can be persuaded to provide what is necessary.
They will change their tune when the money is gone.
@ yoganmahew
“As long as Ireland maintains its rating, nobody can be accused of having bought something duff.”
Rating debt used to mean something to credit committees.
Now credit committees know that ratings can be bought.
Ratings have become yet another commodity.
Everything is for sale.
@ yoganmahew
Everything is for sale.
The IMF are already here.
The Citizen has not been informed.
I call it A39.
“Treason shall consist only in levying war against the State, or assisting any State or person or inciting or conspiring with any person to levy war against the State, or attempting by force of arms or other violent means to overthrow the organs of government established by this Constitution, or taking part or being concerned in or inciting or conspiring with any person to make or to take part or be concerned in any such attempt.”
Everything is for sale. Including Sovereignty.
I didn’t write that someone else did. But every time I vote in a Constitutional referendum I affirm that A39 and all other Articles of the Constitution are extant until such time as the Citizen decides otherwise.
If the price to be paid for Sovereignty is that “Bond Markets” cut off the supply of debt that they would have us consume then so be it.
I would rather the freedom to accept a written Constitution and the freedom of the Citizen to amend that Constitution.
If Grianna Fail are in the justified and ancient business of selling everyone else out for their own gain then so be it.
They can make this Nation a pauper.
But they need to remember the Constituted Will of the Citizen is Law.
_______________________________________________
Show me the Money (Bill)
April 1st, 2010 at 2:06 pm
http://www.irisheconomy.ie/index.php/2010/04/01/interview-with-brian-lenihan/#comment-43058
@Greg
Worrying me that Ned_een might have been on to something:
“We are in danger of viewing Ireland as having a problem we cannot surmount, but that is not the case. Those advocating default would put us in the position of Iceland or Argentina and that would leave us with insurmountable problems,” [ Minister Lenihan] told The Irish Times .“People are perfectly entitled to be angry at the reckless lending of the bankers. I understand that, but Ireland is not Argentina and we can’t go around repudiating our debts,” he added. He said the cost of dealing with Anglo would be “averaged over a number of years and while the borrowing cost will be substantial, it is a sustainable cost”. … “The markets are saying that this is a credible plan … “Nama has proved its virility and the Nama management have got off to a flying start,” he said.
http://www.irishtimes.com/newspaper/frontpage/2010/0402/1224267557226.html?digest=1
Iceland, Argentina!!! YES – Minister.
Minor point: text from New York – Blind Biddy not coming back.
@ David O’Donnell
It is a terrible time when Citizen is left with nothing other than to quote the Constitution verbatim.
Do they know how far they have strayed?
@ David O’Donnell
When you say that Blind Biddy is “not coming back” am I to assume that she has found New York more suitable to her condition, or, and God save us from all harm, that the Borg Eye Socket Implant didn’t take and that she is, how can one put this, “not coming back”.
If the former, she is now in the city of the blind greed. She will fell right at home. The blind don’t know greed though they see it. Not accusing Blind Biddy of greed of course.
If the latter, she is as blind as the rest of us.
God Rest Biddy
@ David O’Donnell
The Constitution is being torn to shreads.
And the President is doing nothing about it.
@Greg
The constitution is ignored – the logic of republic is reversed – and they’re spinning BS goodO to the serfs. By far the worst was the image of Sheeply Shopping on Oireachtas Live on Tuesday night as 83 calmly signed the nation into serfhood as they chuckled to each other while children yet unborn were chained by the spineless whims of GriannaFall. Treason is the only word that comes near.
Blind Biddy has not had the Op. – Swears she will not set foot in the place again while her favourite – Minister Mary – remains in office. “Gimme back the bit o me blind pension dat de sthole an I’ll think about it – the **77^^%%%$$$££***&^ etc she said on the phone.
@All
I’m off to the Cathedral – The Bull is still off the pints, Drico will have a well earned few in the pews, Seven_of_Nine is back, Blind Biddy is organizing the brigade of the blind, the blog is now ‘in’ time, and the serfs will strike back!
@David O’Donnell
At the risk of evoking pathos, both Iceland and Ireland score highly in the OECD Education at a Glance stats for knowledge economy indicators – number of graduates, number of first class degrees, etc.
Also while Ned O’Keefe’s intervention has raised eyebrows, bear in mind that his agri business – pig production – is outside CAP and not subsidized. Irish pork is traded at world market prices. Anyone keeping a non-CAP reliant business afloat deserves some credit. Small point.
@ The Alchemist
Good advice and I for one will take it and continue to badger the EU competition authority. At least they are polite and I think without them it would already have been a bigger slam dunk imposed on us. The rool-over of our debt is going to be where the rubber hits the road.
@Robert Browne
“EU competition authority. At least they are polite and I think without them it would already have been a bigger slam dunk imposed on us.”
I too made a submission to the Competition Task Force about the treatment of rolled up interest in Nama’s business plan
http://www.planware.org/briansblog/2009/10/nama—the-real-default-rate.html#more
and got a fulsome acknowledgement within a week or so. It took the Dept of Finance 2.5 months to respond (after a reminder) with a totally irrelevant reply.
This interview seems to have been written by Jody Corcoran rather than the normally sensible Brendan Keenan.
@ Ciarán O’Hagan,
“such purchases occur elsewhere too”
Of course they do. It’s the extent to which this is happening. It’s all a little too circular. Irish banks buy gov bonds, gov guarantees the funds supporting the bonds. At a certain point, it could start to look a little Enron-esque.