For instance he says:
“I think it is obviously true that one has to try and deal with some of the narrative that has been allowed to be formed which i think doesn’t reflect a comprehensive or balanced commentary of where we are at,” said Mr Cowen.

“Really implicit in some of the argumentation is the idea that it would be better for Ireland to default. But we simply don’t accept that at all and I think all of the implications from other countries where that happens greatly undermines, not just in terms of financial credibility but also the ability to retain confidence at home,” he added.

Which MK article did Brian Cowen read?

For instance he says:
“I think it is obviously true that one has to try and deal with some of the narrative that has been allowed to be formed which i think doesn’t reflect a comprehensive or balanced commentary of where we are at,” said Mr Cowen.

“Really implicit in some of the argumentation is the idea that it would be better for Ireland to default. But we simply don’t accept that at all and I think all of the implications from other countries where that happens greatly undermines, not just in terms of financial credibility but also the ability to retain confidence at home,” he added.

I just wonder where MK implied such a thing?

I suppose 30k for a masters grad to examine whether as a country we are spending more per capita than anyone else ever anywhere would be good value because it would prompt the question why? but not if it took two years - by that time another €10bn may be injected in Anglo and God knows how much more into INBS and EBS and the only value of the research would be a historical comment on our actions today.

Thanks for the IMF numbers but I think your colleague, Morgan Kelly, was talking about per capita comparisons and as all those countries which you have listed have today (don’t have the time for historical investigation into GDPs and national inflation rates) per capita GDPs significantly below Ireland’s then are we not back to possibly being the most expensive € per capita bailout in history?

I obtained the per capita GDPs from wiki here

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Ireland according to the IMF had USD 51 356 per capita nominal GDP in 2009. The closest other country on your list above is Israel who had USD 26 797.

I know there are some many holes in the above but you get the idea.

The point I am really trying to make is that the swedish bailout was not costless, despite it being spun as such after the fact. This was obscured in the run-up to NAMA. In particular, Securum lost money that was regained in nominal terms by the sale of Nordbanken, but they were separate transactions. To say that Securum broke even is profoundly false. The best you can say is that the swedish banking crisis broke even in nominal, non-inflation, non-opportunity cost adjusted terms for the state. But then, you’d also have to say that the swedish state made the terms of the bailout so onerous that 75% of the banking system preferred to take their own medicine and set up their own bad banks.

Perhaps there are fewer cissy bankers in Sweden?

The really difficult part was the blowing of the bubble. Stopping it was always going to be hard to do as the stage had been set in many countries. Still, it might have happened that we could have stopped the waste then.

Now it is mainly downhill. It should be much easier and the EU and ECB have been helping the GFF to govern. I will reiterate, the dislocation is between ownership and need. I am a libertarian, Austrian school type, but even the Jesuits believed in “each according to his need”. Note the sexist language? The papists shut down their communities in South America. Having homeless people is a sad reflection on pseudo-christian values. It also makes economic sense, for any hope of growth. I think the over emphasis on consumerism has been and will be dealt with by the deflation, but everyone needs certain basics and the economy is already reasserting itself. The best solution is to remove government, particularly one that is unsuitable, from all economic activity. It surely has convinced even supporters that it is hopeless in that area and high finance is well beyond it.

NAMA, like all the other bodies, is never going to show a profit in a corrupt regime. Sell everything off and pay off as much debt as possible. It is a wasteful attempt at a rescue for sectors that badly need the chastening effects of a free unrigged market!

Deutsche Bank Research:

Direct fiscal cost of the financial crisis: Probably much lower than feared

Ireland’s direct cost could be at least 3%.

Define bailout? To me its a subsidy below normal rates of return from one party to existing stakeholders. Clearly not every injection from public funds is a “bail out.”

Again you may be right - I’ll try to root out the source that said that by 2008 the Swedish bailout had broken even (I understood in real terms). But regardless would it be fair to agree that per capita the cost of Securum was minute compared with our estimated €25-30bn deadmoney bailout (€3.8bn + €8.3bn + €2.7bn + €0.1bn + €10bn + €?) (Anglo 09 + Anglo 10 + INBS 10 + EBS 10 + Anglo future + INBS/Anglo/EBS additional)?

As for Mr. Fahey, you don’t really expect me to take him seriously, do you?

I would make one smallish, you understand, correction to your above: delete, ‘think’, and insert, ‘know with absolute certainty’. Now, that’s better. If you have created an heroic successful failure, you are ‘honour bound’ to continue!

What we have is a massive, global debt predicament due in most part by the need to conjur up ‘profits’ in the face of a huge over-supply of labour and consumer commodities, parallel to a slow, incremental decline in real incomes of the consumers! The latter are tuckered out and cannot repay their debts, so the only way to extract cash from unwilling debtors is to stiff them with taxes - hence the …. (insert your own versions). If you aggregated all the ’stimuli’ in the eurozone - how much would it amount to for each citizen? And you don’t even have to print anything anymore - just send it by electronic delivery!

The current debate about alphabet-style stimuli, (or whatever you want to name them) is a diversion. MK mentioned two gaping wounds - I reckon its more like a Thousand Cuts. But does it really matter? We’re going to succumb.

B Peter

Have TCD students not produced research comparing our bailout with TARP, the current UK, French and German bailouts and historically the Japanese and Swedish and 1930s US bailout?

What Morgan Kelly is saying in relation to TARP is that on a per capita basis, the Irish taxpayer (or citizenry) is paying far more than the Americans. But is it the case that we’re paying far more than anyone anywhere at any time?

I started looking at this but it takes a lot of research and more than Internet or book research, it seems to need more basic research like speaking with economists and bankers - exactly the sort of research that a worldclass institution like TCD could produce?

“he would say that wouldn’t he” [Bo Lundegrun claiming Securum/Retriva broke even] - Perhaps a fair point but you can read what he told the Oireachtas last year in full here

http://debates.oireachtas.ie/DDebate.aspx?F=FIJ20090707.XML&Ex=All&Page=3

And in particular he said

“Five years later we got back from these bad banks approximately half of that amount and from the nationalised Nordbanken (Nordea), due to dividends and the selling of some shares, in absolute terms we have recovered everything”

And from Dep Frank Fahey

“While Sweden has had a 100% recovery of the money injected by the Swedish taxpayer…”

What does “going postal” mean?

@Brian Lucey - “Its good we have turned a corner isnt it…..”

The problem with corners is they are sharp, hurt when you bang into them and you usually don’t know what’s around them. If TPTB seriously think we have turned a corner then can I have some of what they are smoking/drinking please?

A kleptocracy in action! Get the money out before the courts get it! Using Switzerland for the company really helps too. Probably not owned by BP. Tails I win, heads you lose!

The effects on the body politic need not be guessed at, as we are destined to experience them. We can estimate them and should. More important is what will stop this theft and looting?

It should be triggered soon else the consequences will be most unpleasant for the weakest. Those who consider their position to be strong may find they have miscalculated. Those who find that suddenly like a lot of others, they have nothing further to lose, may react badly and without pause for thought. Going postal may become fashionable.

How much of our future are we prepared to destroy in this way? It is important to realize that productivity has been wasted by the malinvestment to date caused by the bubble. Further attention to recreating growth along these lines is a further waste. Until we know where the sustainable is now located, we shall continue to waste resources. Some resources, labour, will be permanently lost. Investment will cease. Reflation can then begin. But how to minimize the waste?

Producing something is essential to social cohesion and may also make profit, or savings possible. Extracting paper value from capital fluctuations by the IFSC will be of little benefit to Ireland?

Food production even if surplus to requirements, should be increased, if storage is possible. Forestry may be very productive, especially if hardwoods are planted. Mining may also be pursued although exploration is certainly beneficial. Ireland must cease rent seeking, although it can tolerate fairly high levels through Tax treaties and the IFSC. Land policy has to be turned on its head and the best way is to impose a tax on a sq ft basis, for ease of calculation and to bring down the capital values to enable sensible development.

Given the lack of maturity of leadership and corruption permitted and even encouraged by those who know better, I see the potential for social division. The law has to be applied in Ireland, come what may. There are ways to force those who know better to do their duty.

Most of this looks to be debt not equity. Possibly even further up the capital structure than the useless prefs injected here.

Sachsen LB required a 17 bn euro bailout by its fellow banks organised by the Bundesbank. LBBW required about 6 bn partly from the state of Baden-Wurttenberg. BayernLB needed 30 bn. West LB got 8.2 bn.

Now, in relation to the size of the German banking system, it is small beer, but it does exist nonetheless; the Germans set up a 500 bn euro fund to bail their small and medium banks out.

So, Yes, the German got has injected…

No, the German govt has injected little in the way of equity into their system. The injections into Commerz are more prefs if even at that level. Also the toxic assets in the Landesbanks have not been marked down. Private capital has not been mobiliesed to any great degree. Deutsche Bank is still the most undercapitalised of the global investment banks. Some estimates put the hidden losses in Germany at upwards of 200bn.

I do not agree. The US crisis was a good old credit crisis on top of excessive leverage. Loan losses exceeded past recessions. However, regulators acted promptly to provide liquidity, a steep yield curve and encourage capital raising to repair balance sheets.

@ jagdip,

What German bailout?

My point is if you say recap = what TARP became, NAMA = Maiden Lane (what TARP was intended to be), we are huger on both sides, proportionately - both the recapitalisation required and the unsalvagely toxic assets that have to be taken away and shot.

“Securum and Retriva (Sweden) had a loss in 1997 when they were wound up but they held residual shares in banks and last year at the Oireachtas theSwede behind the bailout plan stated that on a nominal basis they had broken even.”
Well, he would say that, wouldn’t he. At the time that Securum was wound up (in 1999, I think) and rolled into Retrieva, securum had made a constant money loss of 40%, I believe. It only ever took on the debt of one bank (Nordbanken), which was the equivalent size of Anglo (proportional to the rest of the swedish banking system). The shares were held separately. There was an international asset boom while Securum and the other private banks were working out their bad debts - credit was cheap and getting cheaper, but more importantly, there were many buyers.

@Adrian
“omparing the bailout in Ireland to the US one is very misleading if you only include the TARP funds.”
Sure, but we haven’t even started on the ECB liquidity funding, unlimited repo, borrowing at the refi rate etc. I believe that TARP and Maiden Lane between them constitute a comparison between NAMA and recapitalisation.