Categories Uncategorized WSJ: ECB and Senior Bank Bonds Post author By Philip Lane Post date July 16, 2012 108 Comments on WSJ: ECB and Senior Bank Bonds The lead WSJ article today reports that the ECB now advocates the bailing-in of senior bondholders. Related ← Dublin Economics Workshop October Conference → Vacancy: Assistant Director General CSO 108 replies on “WSJ: ECB and Senior Bank Bonds” Well done, Draghi. Now if only Barroso could be exited stage left, we might get a Commissioner who could exercise a little independence from the larger powers. So which countries are still protecting the bank bondholders? And have been doing so all along. No prizes for guessing! What is the probability that this entire story is nonsense? And that the ECB have not in fact changed their position This article does not seem like idle speculation. I think the ECB leaked this news to soften the market up. @ JMK Very high, IMHO. What does emerge is the fact that (i) the ECB considers the solvency of banks to be a matter for EA governments (nothing new there!) and (ii) these governments are unwilling to bite the bullet with regard to the treatment of senior bondholders, no doubt, as Eureka points out on another thread, because they fear that this would make their banks unfundable. @ All Merkel has crossed the T’s and dotted the I’s as far as the issue of ultimate liability for direct recapitalisation of banks is concerned. The matter has not been decided and when it is anything that is not linked to strict conditionality will have little chance with Germany. http://de.reuters.com/article/economicsNews/idDEBEE86F00X20120716 @ DOCM the ECB’s change in tack would make sense in lieu of them likely becoming the new pan-EZ banking supervisor. Basically they want the ability to forcablly bail-in or wind up non-viable institutions. Having a supervisor without these powers would somewhat blunt their authority. As we have seen throughout this crisis. The ECB wants to have the sort of powers that our Minister for Finance currently has via the CIFS legislation which was used to annihalate (rightfully) subordinated debt holders at Anglo and Irish N’wide, and to be able to go futher up the food chain. Basically we’re looking at something towards what the Fed, Treasury and FDIC can do combined in the US. What are the implications for deposit holders if senior bondholders are given an equity stake in the bank in place of their original bonds? Wasn’t the fact that deposits and senior debt rank pari passu one of the main reasons cited for fully repaying senior bondsholders in Anglo? How would they overcome that hurdle? 4 years post lehman with low (if any) growth, sovs saturated and monetary policy increasingly ineffective it seems right for senior bank bondholders to ‘give one for the team’. @Bond. Eoin Bond Bingo. I’d say they realize that they need these powers to do their job effectively and fairly. I would not dismiss this story as nonsense, we may not derive any benefit from these changes for a long time given how slowly things move in euroland but senior bondholders have been given a clear warning. Hopefully Ireland will benefit from this in future. Well…. after 3 years of Ireland suffering for its throwing itself on the senior bond grenade, manfuly defended here by many as TINA, now we see the arms instructor saying “err…no, best let it explode elsewhere” Surprisingly high density of slow-learners in Frankfurt! David OD As the Good Friday Agreement was noted as “Sunningdale for slow learners” it seems that this will be “anglo for slow learners” Assuming this is true ,it will certainly not be retroactive in its implications and therefore not change anything to Ireland’s predicament. OC : that is almost certain. Still, a moral victory is better than abject continual defeat no? @ BEB I think that we are only in the foothills of the banking supervision negotiations. What is clear that the legal base will be provided by Article 126.7 TFEU the text of which is as follows. “6. The Council, acting by means of regulations in accordance with a special legislative procedure, may unanimously, and after consulting the European Parliament and the European Central Bank, confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings”. It will be noted that a proposal from the Commission is not specified. In practical terms, of course, such will be made but the role of the Commission is not as strong as when the Council can only act on the basis of such a proposal. According to press reports, the ECB’s required opinion may well be a proposal in its own right. John Bruton has a very interesting piece in today’s IT which references the Bruegel paper on banking. http://www.irishtimes.com/newspaper/opinion/2012/0716/1224320203680.html http://www.bruegel.org/publications/publication-detail/publication/731-what-kind-of-european-banking-union/ @ BEB The views of the head of the EBA are also pertinent. http://www.ft.com/intl/cms/s/0/574c19ac-cd1d-11e1-b78b-00144feabdc0.html Assuming it is true, it doesn’t have to be retroactive to improve Ireland’s predicament. Our government is not relying primarily on legalities to relieve us of odious public debt. It is relying on the politics and practice of crisis management to reach a point where enough of the other stakeholders feel it is easier to give us relief than otherwise. If this report is true, it moves us further along that path, partly because it promotes the principle of bailing in seniors, and partly because it helps carve us out as an outlier exception that can be helped without having to give the same to others. The amounts involved are big for Ireland, but are small enough to almost be hidden in the petty cash of European crisis interventions. That means there are any number of ways in which relief on the principal could be funded, including but certainly not limited to: the paper gains the ECB has made by purchasing sovereign debt at a discount and that the ESM may make in future; ECB seigneuriage; messing with the promissory note conditions; purchase by the ESM of shares in Irish banks at favourable prices; or even (if unlikely) direct ESM funding of debt write-offs. Should have, could have , would have……… Maybe its too late for this now 5~ years after the event. Maybe its a failure(treachery) of Goverment will rather then the ECBs naturally evil intentions to make money for its little sisters.(what other purpose has it ?) In the words of S.o.V. “Credit money expansion replaces a great debt with another, greater debt. There is never a net reduction in the debt, only a perpetual increase. Treasury money expansion is repudiation of debts => repudiation of (pre-existing) money, institutionalized default (expansion includes purposeful inflation). Finance offers fiat debt then demands repayment in circulating currency (gold clause effect). Fiat currency offered by the government to retire fiat debt: both the debt and the currency are extinguished at once. The creditor says, “You owe us, you must pay with circulating money!” The debtor says, “There is no circulating money, the creditors refuse to lend …” The creditor says, “We will seize your property instead and destroy your economy!” The government (which is also a debtor) says: – “We will create money without borrowing and repay the loans as they come due. We can do this because we are the government, our money is paid to our army.( very small army)” – “The loans are fiat — they were created by the lender with the stroke on a keyboard, they were not made from circulating currency. To act as if they were is a crime, a false claim. The lenders will be repaid by a stroke of the keyboard, in the same form as the debts were issued. If you or other lenders touch our property or our citizens we will throw you into prison and decide later whether to feed you or not.” – “Because lenders have impoverished our country with endless false claims we will punish you severely whenever we can get our hands on you. You are our enemy and we will destroy you if we can, because you have sought to destroy us!” Now that would be refreshing. But some of us know what guys like Bruton represent………………. I see cuckoos everywhere. The entire apparatus and assumptions are plainly wrong ? Trying to sustain a sustainable rate of extraction now….. The central question is who gave these guys the right to extract via keyboard money ? Who gave them effective executive power ? We did via the advice of our local elite which subsequently quite accidently… benefited their accounts. The bailing-in of senior bank creditors is something that is coming down the track anyway as part of the new EU bank resolution/EZ bank supervisory regimes. Whether it will be applied a bit earlier in the Spanish case still can’t be certain. From an Irish perspective maybe it’s the case that the October deadline set for a decision on our situation is too early. If there was to be burden sharing with senior bank bondholders in Spain it would strengthen Ireland’s position but it still unlikely that this could happen by October. If it were to happen it would probably be limited to defunct banks so it does put Anglo and INBS in ‘play’ but the extent to which it might change things could also be limited. The bulk of Anglo’s funding came from wholesale deposits. There is also the treatment of secured and unsecured creditors and, of course, in the Irish case there is the (unilateral?) decision to provide a sovereign guarantee for bank liabilities. I have found some of the WSJ reporting in the last few weeks a little odd. The treatment of the issue of sovereign guarantees for ESM recapitalisation of banks left out a lot of important statements (and some of the most important were even extracted by WSJ journalists at the press briefings). They made a lot of Schauble’s comments but as it was in German we don’t know the full extent of what he said. In this instance we know the ECB favours a move to the bailing-in of senior bank creditors but wants to wait until this is formally put in place. It doesn’t really need to be “put in place” but that is the approach they are taking and a more formal framework would put it on a more solid footing. It would be nice to have some support for the WSJ’s take that the ECB are in favour of burden-sharing with senior bank bondholders in Spain now. “According to people familiar with the discussion” isn’t even our good friend “Senior Unnamed Official”. Here is an extract from the EFSF’s Guideline on Recapitalisation of Financial Institutions which suggests that some elements of the proposed bank resolution regime could be brought forward “where appropriate”. The last listed is “bail-in tools”. Where appropriate, additional conditionality could draw from the future EU bank crisis resolution framework, which will be proposed by the Commission after summer. In particular, such a conditionality could include requirements to enhance the supervisory toolbox in the three crucial phases of crisis management identified (preparation, early intervention and resolution) such as recovery and resolution plans, early intervention tools for supervisory authorities, asset separation tools, bail-in tools. It is not clear when the EFSF published these guidelines. @ DOCM its a power struggle for what will become one of the most important institutions in the EZ or EU, and therefore the world. The ECB wants it, the EBA wants it (possibly by offering to merge itself into the ECB’s structure), the existing national regulators may want to retain it, Finance Ministers want to keep themselves involved and the EU Commission wants to see where they fit into it all. And its going to have a hideous (albeit justified) amount of resources and political weight behind it. If the ECB gets it, Draghi will have essentially the combined power of Sheila Bair and Ben Bernanke, as well as some elements of what Geitner has, despite a relative lack of direct accountability. Somewhat scary, although i do like the guy. Bailing in senior bond holders in insolvent institutions would be the moral thing to do, it therefore seems extremely unlikely that the ECB would countenance it other than to improve their own institutional clout. However who knows what the balance of terror is in Minimammon at the moment? The ECB obviously wants to preserve the power and role of the Eurozone financial sector as far as is possible but if they have come around to the belief that Spain’s banking system can not be saved and the core banks are sufficiently disengaged perhaps they would cut out the rot? Just to refine what Bond Eoin Bond said it would be an awful, awful thing if Europe’s Fed/FDIC equivalent was to be the current single mandate version (with banking stakeholders) version of the ECB. @All On the assumption the story is accurate I just wonder what the ECBs stance in relation to the ELAs will be? Given that in the vast majority of cases senior and many subordinated bond holders have already been paid in respect of bust Irish banks I’m curious as to how the ECB will treat a loss on their own books. Badly one would assume – so Irelands chances of a deal on the PNs/ELAs is poor in my view. Seamus Coffey may very well be right in that this new regime was coming anyway and really its now only about timing. We all know in financial markets timing really is everything and the Keynes quote regarding ones solvency and markets remaining out of whack is very apt in the Irish case. So without knowing the full facts of the situation I think finally the penny is begining to drop with our Euro leaders and that basically is the fact that the rules of economics hasn’t actually changed throughout the crisis. Bad business models deserve to fail and those that finance them deserve to lose their money. Pretending otherwise as we now know, doesn’t work. I don’t buy the argument that pari passu treatment for bond and deposit holders precluded such decisions. A simple solution going back to the summer of 2007 was to have the ECB guarantee all deposits for viable banks and for all manner of bond holders to take your chances/losses would in my view have avoided virtually all the nonsense that we’ve seen in the interim. The queues outside Northern Rock branches should have had the ECB and everyone else awake to the wider problems instead the ECB was busy raising base rates to 4.25% in the summer of 2008 and the opportunity to get ahead of the problem was lost. This is welcome news. Though we need to see how German interests try to pull back from this position. In a perverse way, if Ireland gets compensated for being forced to take such losses, it could gain more than Spain. (in the sense that who’s been buying Spain’s snr bank debt for the last 3/4yrs). “But a chief reason ministers decided not to make more privileged bondholders take losses was the Irish precedent, two people said. Dublin has had to pump more than €60 billion, equivalent to around 40% of its annual gross domestic product, into several struggling lenders, forcing it to request a €67.5 billion bailout from other European countries and the International Monetary Fund in 2010. Forcing senior creditors to take losses in Spain would have raised more questions in Ireland about why taxpayers were forced by the EU to take on the huge burden of repaying high-ranked bondholders.” Our €60b is the least of their worries and we have been questioning the ECB’S/EU’s actions for years now. These paras do not make sense to me for those reasons. “The EU is now trying to rectify this situation and in June proposed a new legal framework for dealing with failing banks, which is cited in the Spanish bailout accord as a model. Crucially, the new rules would force national authorities to force losses on—or “bail in”—all creditors, for instance by converting debt into shares, when a bank has to be recapitalized by its governments.” Prof Karl Whelan interprets ref to ECB guidelines as meaning no bail-ins for seniors pre 2018. Author takes opposite view. Who is correct? The fear for other countries will be that Ireland will effectively have gamed the system if senior bondholders are forced to take haircuts elsewhere. We will have protected our senior bondholders as the money has been handed. We will then get a subvention form the EU for this dirty deed. Others will have to burn their senior bondholders and suffer the consequences. M O R A L H A Z A R D. @Joseph Ryan “So which countries are still protecting the bank bondholders? And have been doing so all along. No prizes for guessing!” Not Germany anyway. Germany is the one country that has cotemplated default at all stages. Germany is also the country that has raised concerns over the capacity of core countries to fund a rescue. @zhou_enlai Germany is the one country that has contemplated default at all stages. Germany is also the country that has raised concerns over the capacity of core countries to fund a rescue. The German position has moved between nuanced and schizophrenic, and on several levels. Before quitting the Bundesbank in disgust Axel Weber said words to the effect that he did not see why Ireland should have to make senior bondholders whole at enormous cost to the state. This was the principled German position. Then it became apparent that the cascading losses from a Europe wide clean out of the financial system that would be provoked would entail German banks taking a battering, the monetization of at least some debts (polluting the vital essence of the previous, precious currency), domestic political trouble for Merkelism and eventual change in the structure of EMU. Full domestic liability for private banking debts became the order of the day. Germany was and is caught between its understandable disgust at the financial sector internationally, the urge to protect its own banks and its regrettable status as the home of spittle flecked Austrian gold bug economics. There is no free lunch, of course. Weaker banks will have to pay higher rates for debt. Seamus Coffey said in 2011 that more than half the value of Irish bank bonds were held in the Republic. So a bail-in in Spain could burn a lot of people in the private sector. Why not when they have all teh perks! <blockquote> html tag fail in previous post. My apologies. Only the first line was zho_enlai’s. @zhou_enlai Germany is the one country that has contemplated default at all stages. Germany is also the country that has raised concerns over the capacity of core countries to fund a rescue. The German position has moved between nuanced and schizophrenic, and on several levels. Before quitting the Bundesbank in disgust Axel Weber said words to the effect that he did not see why Ireland should have to make senior bondholders whole at enormous cost to the state. This was the principled German position. Then it became apparent that the cascading losses from a Europe wide clean out of the financial system that would be initiated would entail German banks taking a battering, the monetization of at least some debts (polluting the vital essence of the previous, precious currency), domestic political trouble for Merkelism and eventual change in the structure of EMU. Full domestic liability for private banking debts became the order of the day while the core banks disentangled their interests and debt became regionalized. The periphery was to be cut off as far as possible to save the core even if this meant mortally wounding them. Germany was and is caught between its understandable disgust at the financial sector internationally, the urge to protect its own banks and its regrettable status as the home of spittle flecked Austrian gold bug economics. Michael Henigan ist not what was owned in mid 2011 : its what was owned by whom (qui bono) n late 2008. Hint : it wasnt those dastardly public sector people whom you so love. @Zhou re: “Not Germany anyway” So who blocked the Draghi move at the latest summit? Not for one moment do I believe that the ‘no senior gets burned’ would have survived so long if it did not have the full backing of Germany and France. Probably more France than Germany but they were allies on this policy and France had the right man in the right place to effect it. @Eoin I don’t disagree that your interpretation is a possible one. There is a consistent alternative, though – the ECB, having realised that enforcing no losses on senior unsecured leaves them as the bagman for failed states is now seeking to step back over the line it crossed in 2008. I sincerely hope that your explanation is right; my concern is that we’ve seen little in the way of willingness of the ECB to be responsible for the outcomes of their interventions. They have consistently played the role of pusher – you will take unlimited credit into your economy, what? You had a credit bubble? Not our problem. You will make senior bondholders whole, oh, you died? Too bad, that’s your problem. The apparent ECB stance is really a statement of the obvious. Lots of smoke and mirrors have been employed top distract the gullible parts of the audience for 2 or 3 years to let the game of musical chairs continue into extra time to accommodate some players. The whole thing could get strung out for quite a while even after this report – if it is correct. Ireland could have done a lot more to be a lot less accommodating PR-wise to the smoke and mirrors guys. Plenty of people in financial media / analysis / management were ready to run with the argument a long time ago, but got bored with the full-on Irish Stockholm act. @Eoin Bond You might be able to help me out with this. Our bank recently told us that our deposit accounts were covered by a stage guarantee (under the ELG I think). We did not go through any of the formalities to have our deposits guaranteed. I thought that there were formalities to be fulfilled to benefit from the ELG but the bank said they had looked after all that for us without our asking. I was surprised because there is a cost to the bank. Is it correct that we could have been signed up to the ELGS without our knowing? Were banks allowed by the Govt to sign up depositors to ELGS en masse without depositors making any specific request or opting in? @ All Cliff Taylor has a spot-on take on the situation in the SBP daily digest. http://www.businesspost.ie/#!story/Home/News/COMMENT%3A+ECB+hints+at+flexibility/id/19410615-5218-5003-f67b-5b86e9494612 The only qualification is that the last-mentioned possbility – as advocated by Karl Whelan – is unlikely to be a runner. @ Joseph Ryan I agree! What happens in the EU at an institutional level simply cannot be divorced from the wider political background and fault lines. None of the players is operating in isolation from the others. There’s a pattern here. Some half decent article or other is spot on, but Karl Whelan’s take is, on the basis of assertion, rubbish. @ BeeCeeTee Are you not overdoing it a bit? Where did the description as rubbish figure except in your own imagination. The reference in full; “There are simple ways to do things – as economist Karl Whelan has pointed out, the ECB could easily decide to give us a break in terms of the promissory note repayments, as these are due to its Irish arm, the Central Bank of Ireland. However doing things simply never appears easy in tackling the euro crisis.” This idea has always seemed to me to be non-runner because of the precedent it would set. Maybe I am wrong and Karl Whelan is right. This is a debate; nothing else. There are very few slow learners in Frankfurt. They are noted for thinking 3 moves ahead. The moats around the still solvent, core banks that are dangerously exposed to the periphery are being widened. The WSJ caters to its subscribers and engages in wishful thinking that is upbeat and sells newspapers. The weekend FT (July 14/15) has an article in the House and Home section by Lucrezia Reichlin “I take responsibility”. One interesting point is she was in Brussels at a meeting recently of economists working on a blueprint for further financial and fiscal integration. It is more social commentary than usual but gives some useful insights into current thinking prevailing amongst the economic intelligentsia. @ Zhou all deposits are automatically covered by the ELG at the domestic Irish banks. Bank of Ireland have started offering ‘opt outs’ on some of their deposits, think the other banks examining this option as well, but its more aimed at corporate market. “Is it correct that we could have been signed up to the ELGS without our knowing? Were banks allowed by the Govt to sign up depositors to ELGS en masse without depositors making any specific request or opting in?” Yes. For the last couple of years the Irish banks have not been offering unguaranteed deposit accounts as far as I’m aware. BKIR has started offering deposits outside the guarantee recently I believe, so you now have a choice again. I’m not sure if the other Irish banks have have followed yet. Bank of Ireland senior management has spoken quite a lot in the last 6 months about weaning depositors off the guarantee which is expensive for the banks (very profitable for the gov) and about reducing deposit rates generally. @ BeeCeeTee By the way, on reading the extract again, I would take issue with the author on another point; the description of the Irish Central Bank as simply the “Irish arm” of the ECB. This it most certainly is not cf. relevant article of TFEU. Article 127 1. The primary objective of the European System of Central banks (hereinafter referred to as the “ESCB”) shall be to maintain price stability. Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union. The ESCB shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 119. @ Michael Hennigan “So a bail-in in Spain could burn a lot of people in the private sector (in Ireland)” I am willing to bet that the vast majority of the Irish owners are foreign MNC’s. No doubt they will be lobbying hard to ensure they are not asked to take a bath. It its a bath they should have been forced to take long ago. @eoin thanks for that – accords with what I was told – did not realise ELG was automatic @Carson Ditto. We have been offered unguaranteed deposits. The way I see it, if it comes to depositors at our bank taking haircuts the sovereign will likely have defaulted anyway. Of course this may not apply in extremis. @ eamonn moran US MNCs can buy US Treasuries with foreign cash without creating a tax problem. Why would they invest in Irish banks and also incur an fx exposure? Well, well, well, The ECB has changed its mind! If this is true, it is remarkable. I remember the dismissive manner in which questions in relation to this policy were dealt with – the ECB knows best was effectively the only answer!!!! Surely the executive board of the ECB must now resign. Their position is untenable. If a politician was forced into this type of u-turn he would be hounded – and if he was forced into this type of u-turn having being as dismissive of the alternative view as teh ECB was he would correctly be viewed as having lost his credibility. Now, politicians can hold on to the next election – but these guys aren’t elected! They ought to be effectively forced out by popular opinion and an inquiry launched into what is a preposterous turn of events. From rte… “”The ECB’s advice aims to ensure that the treatment of senior bondholders is in line with EU rules,” he said, without elaborating on what the EU rules were. The first euro zone official said there was a difference between a bank bankruptcy, which would be governed by bankruptcy law, and liquidating a bank that could not stand on its own in the longer run. “We don’t want any bank bankruptcies in Europe, because that would cause Armageddon, but resolving non-viable banks is a different issue,” the official said.” Anyone know what the EU rules are or do they just make them up as they go? To revive returns we’d either need to destroy capacity on a horrific level — and make ourselves much, much poorer as a result — or come to terms with the fact that returns on investment will never be the same again http://ftalphaville.ft.com/blog/2012/07/10/1078071/the-negative-fear-bubble/ It seems odd that amidst the plethora of rumours emanating from the eu leaders summit and eurogroup meeting this story only emerged now. Why would the Eco u turn at the finance ministers meeting only just after the eu leaders meeting. ? 07/16/2012 Interview with Jean-Claude Juncker ‘Europe Will Either Succeed or Fail Together’ In a SPIEGEL interview, Euro Group president and Luxembourg Prime Minister Jean-Claude Juncker, 57, discusses the dispute between Germany and Italy at the recent EU summit, why he believes Merkel is wrong about euro bonds and his desire to have an elected president of the European Union. http://www.spiegel.de/international/germany/euro-group-president-juncker-discusses-path-forward-in-euro-rescue-a-844453.html Ireland’s poorest get 20% poorer as richest get 4% richer By Evelyn Ring Monday, July 16, 2012 Ireland’s poorest families experienced an income drop of almost 20% in one year while income of the richest increased by 4%. The figures released today by Social Justice Ireland are calculated from the latest CSO data and relate to 2010. There was a drop of more than 18% in the disposable income bracket (after taxes are paid and social welfare received) for the poorest households during the year. Social Justice Ireland has blamed government policy for continuing to increase the income of the richest 10% of households and widening the gap between the wealthy and the rest of society. … “Decisions have been taken that have seriously damaged Ireland’s most vulnerable people, that place a disproportionate burden on their shoulders, and seriously damage the social infrastructure on which they depend,” he said. Mr Healy said the Government’s budget last December was likely to make the situation worse because it hit the bottom income level rather than the top. He pointed out that both Social Justice Ireland and the ESRI had shown that the budget was totally skewed against people on low incomes. http://www.irishexaminer.com/ireland/irelands-poorest-get-20-poorer-as-richest-get-4-richer-200840.html 07/16/2012 Chancellor Denies Caving at EU Summit Merkel Says Bank Bailout Liability Still Undecided German Chancellor Angela Merkel on Sunday rejected criticism that she had caved in to Italy and Spain at the last EU summit in Brussels. She said the question of who should be liable in future bank bailouts — national governments or the EU bailout funds — had not been decided yet. http://www.spiegel.de/international/europe/merkel-to-secure-votes-for-bailout-of-spanish-banks-a-844601.html @ Seamus Coffey This EFSF memo may interest you (courtesy the Dutch Parliament and the website Open Europe). http://www.openeurope.org.uk/Content/Documents/Pdfs/SpainEFSFconfidential.pdf @ All At the risk of drawing the ire of BeeCeeTee once again, the following was my favourite quotation from the comment by Cliff Taylor. “According to the [WSJ] report, the Ministers rejected this because they were worried about the market reaction and also, reportedly, the reaction in Ireland, where the non-burning of “seniors” is blamed for most things (health cutbacks, new taxes, the weather, our early exit from the euro championships etc)”. @DoD http://www.guardian.co.uk/commentisfree/2012/jul/15/will-hutton-social-mobility The rise of rightwing individualism and an accompanying celebration of the private and distrust of the public, is undermining the diversity and strength of our social institutions. The much vaunted flexible labour market – code for a world in which its principle institution, the trade union, is enfeebled and workers are treated as commodities – is a mortal threat to the cohesion of the working-class family and its chances of being a platform for aspiration and mobility. Every institution that might be expected to alleviate their plight – family, school, voluntary organisations and church – has become dysfunctional. If we had burned the seniors, the situation could hardly be as bad as it is now could it. All that this policy and it’s loyal defenders (many on this site) has achieved is the impoverishment of the state and the subversion of capitalism. There are many many who should hang their heads for their feckless, heedless howling down of the many who called for the seniors to be put in play. But, they won’t. Yes, it would have caused mayhem. But that’s what we have now anyhow. I’m not sure what the surprise is – the ECB abhors uncertainty, not private sector losses. It makes sense that it would be willing to contemplate PSI within an agreed bank resolution framework, however much of a surprise that may be to those who believe the ECB exists to protect banks and bondholders. It’s also hardly surprising that the financial press have a certain amount of difficulty deciding on how to spin such a development. @zhou_enlai What premium is the bank offering you over guaranteed deposits? A good chuckle http://www.huffingtonpost.com/2012/06/19/paul-krugman-ireland-is-r_n_1609089.html @ seafoid Great. Let’s have stronger trade unions that can decide what job you can work in and how much you can earn – that was terrific for working class mobility. Roll back the State. Let’s have stronger families, voluntary organisations, churches, social institutions, etc. as these are an antidote to State power and control. It looks like the left has now got totally confused. Karl Marx must be spinning in his grave. Oh and throw in a few lazy cliches about ‘rightwing individualism’. The PS union I used to belong to still includes me in its emails urging me to follow it on Twitter and Facebook – technologies which are the ultimate celebration of individualism. Judging by Hutton’s article, the left has now officially gone up its own a*se. …..am not sure about this. I suspect end game is being reached. I think a lot of work has been put into modifying exposures over the past 3 years. This is leaving some institutions in much better positions than others. I think that Mario is signalling that he will now withdraw cover from weaker banks only so that their fall can benefit the better positioned institutions. @ Bunbury + 1 I did read that piece too and what occcurred to me was that the search for Utopias by ideologues on both sides of the spectrum usually ends in disasters. Some of course will always take what suits in practice. Mitch McConnell, the Republican leader in the US Senate had a heart bypass in a Navy hospital but rails against socialised medicine and so on. @ Gtfaway All that this policy and it’s loyal defenders (many on this site) has achieved is the impoverishment of the state and the subversion of capitalism. There are many who should hang their heads for their feckless, heedless howling down of the many who called for the seniors to be put in play. It’s a pity all the outrage came a bit late. Where are all those folks now who were blind to reason because the free lunch had been invented? Where are the cultists who believed a tooth fairy had left a philosopher’s stone at a shrine called St. Luke’s? Some are breastbeating about bondholders! There are a few bitter truths that are relevant: 1. When the builders’ bank was nationalised in early 2009, there were no aces to play. Ireland was the only EMU member to guarantee bank debt during the crisis. 2. On ‘impoverishment,’ the same group with admirers and cronies, twice in a generation brought the economy to the brink of ruin. In the 1970-2008 period, Ireland in 1978 had the record of the highest annual budget deficit among OECD countries. As regards the recent crash, there were other factors but lets not play Paddy the eejit – – the disaster was mainly a homemade one. 3. The ECB’s senior bondholder ban was too crude but lets not forget that in 40 years most of the benefits of EU membership have been one way. Not a cent has been paid towards the EU budget since 1973 and cash aid has been received that exceeds the whole banking disaster cost. So when the rule suits, we don’t complain. 4. There is also an interesting asymmetry as regards fairness. Separate to the issue of the corporate tax rate and tax harmonisation, there is no apparent concern that Ireland facilitates massive tax evasion that affects small struggling countries as well as big. Cute hoorism is alive and well. Where are Dublin’s “pari passu” jesuits at this stage? Shouldn’t they be denouncing Mario from the pulpit already? @ All Media reaction in Ireland to the WSJ article has been, and with good reason, rather muted. Belief in Santa Claus fades with the years. Handelsblatt has a fairly exhaustive briefing on the situation, opening with the reaction of the head of the association representing bank bond investors, contrasting what Draghi actually said with the situation prevailing at the time of the Irish bank bailout – including a reference to the legal actions being taken by “burned” subordinate bondholders – and closing by noting that the ECB has covered its new position without actually retreating from it. http://www.handelsblatt.com/politik/international/bankenabwicklungen-aktionaersschuetzer-warnen-ezb-vor-krisenverschaerfung/6885850.html @DOCM “Handelsblatt has a fairly exhaustive briefing on the situation, opening with the reaction of the head of the association representing bank bond investors,..” In the interests of balance if nothing else, do Haandlesblatt have any comment from taxpayers afflicted with bailing out the friends, associates and clients of the above gentleman. (head of the association representing bank bond investors)!!. That said, the Cliff Taylor comment that you referenced does hit a very soft point that badly needs to be hit. @Bunbury That is a bit harsh on the Hutton article. Further I have no idea why you still classify trade unions as ‘left’. Given the performance of trade unions, particularly the PS unions in this crisis, I would place them unequivocally on the ‘right’ side of the spectrum. @ Joseph Ryan I try to avoid making value judgements in a debate on economic activities as they seem to me to serve no useful purpose. The Handelsblatt article I found to be of interest because it underlined the other side of the coin; the concernss of the bondholders (who seem confident that they have the law on their side). Whether those acting on their behalf are gentlemen or not, I do not know. But they represent pension funds and the like in which the ordinary taxpayer has a primordial interest. @MH “Seamus Coffey said in 2011 that more than half the value of Irish bank bonds were held in the Republic.” Is there something published that supports or confirms this position or is this speculative? @DOCM I try to avoid making value judgements in a debate on economic activities as they seem to me to serve no useful purpose. That position lies somewhere on the continuum between lying to yourself and attempting to deceive others. This is a common trope among the right and the feudal network of the modern financial sector – that they are the cold realists while the left are utopian fantasists unable to deal with the current state of the law/globalization/power relationships, as if the current state of these things were immutable, desirable and in some sense just. In fact the modern right has made a series of shockingly selfish and angry value judgements and is engaged is a long and quite successful fight against popular democracy, the poor, social justice and the reforms of capitalism in the twentieth century. It is a particular corker to hear how law supports the right of the private pension industry to make poor investment decisions and get away with it at the cost of a generation of citizens (not taxpayers) of another state. Who exactly does the law really serve? http://www.scribd.com/doc/100246412/Swedish-Banking-Resolution Worth noting might be the employment/unemployment impact and duration even with the ‘magic’ of devaluation. Much of this ‘left’ and ‘right’ stuff above strikes me as cobblers. Its about powerful and politically influential self-interested power groups. Labelling as ‘left’ or ‘right’ those successfully lobbying for bondholder bailouts or Croke Park bailouts is missing the point. You can’t blame people for chancing their arm – its up to governing authorities and governments to say “no”. Meanwhile, back at the ranch….. “According to Deutsche Welle, Germany’s constitutional court has confirmed that it will not take a decision on the European stability mechanism (ESM) and fiscal pact until mid-September.” http://www.theparliament.com/press-review-article/newsarticle/eurozone-fund-must-wait-on-german-constitutional-court/ @ Joseph Ryan Coincidentally, I came across this item in the IT about the “war of the economists” in Germany. http://www.irishtimes.com/newspaper/world/2012/0717/1224320254507.html Insofar as one needs credo in the context of a blog such as this, the following comment sums the matter up as far as I am concerned. “Economists are just people and not clairvoyants,” said Dr Thomas Straubhaar, head of the World Economic Institute in Hamburg. “We can do little more than advise, highlight and deliver insights – with decision-making left to politics and business.” There is no shortage of blogs dealing with the latter two topics. Of course, the interaction between all three cannot be avoided. But the downside of confusing the role of economist and activist is evident (and not just in the case of Sinn). Relatedly there is an interesting post from Yanis Varoufakis about the president of the French central bank acknowledging that the current policy of prioritizing the survival of the current version of the Eurozone financial sector and system over the health of national economies has failed. No bondholder left behind and the various other attempts to cajole the financial sector into usefulness were not only wrong in a moral sense, the measures achieved the opposite effect to the one intended by contaminating the various sovereigns with private debt and damaging the real Eurozone economy via collective austerity. @grumpy You can’t blame people for chancing their arm – its up to governing authorities and governments to say “no”. I take your point on the virtues of saying “No” (and the interest groups, the white collar PSU are not card carrying communists) but I think it is necessary to try and apportion some blame for the arm chancing that went on at multiple levels. Why otherwise will people change their behaviour? Off topic clarification request: Is the €2billion stimulus package just announced an addition to the existing capital budget as agreed in the MOU, whatever that amount is? @Carson I am not sure what the precise figures were as I did not take notes at the meeting. There were a lot of new account types proposed as well. I should probably keep it confidential in any event as that was the nature of the meeting. ” Shay “its up to governing authorities and governments to say “no”” Then it comes down to who has influence, who has access and what their world view is. In most of the OECD that will be some form of neoliberalism. Ireland is the same. Let the small people take the pain. Elite incompetence on a par with the Somme trenches. First Iraq and now the financial crisis and we are barely 30 years into the project. @ V Barrett, It’s all here in this table from the Central Bank. See ‘Debt Securities Issued’ under liabilities but remember that there are lots of entities resident in Ireland. @seamus I’m making the assumption that ETFs domiciled in Ireland along with nominees and custodians based in the IFSC are counted there as “domestically held”. Do you have any more precision? @SC Thanks for the that and reference. Forgive my accounting ignornance but what explains the dramatic fall in government deposits in July 2011? Pension fund raiding? Is it related to a similar increase in assets (“Holding securities issued by Irish residents”) in October 2011? @ V Barrett, That money was initially put on deposit in the banks in April and then was used to recapitalise them later in the summer. You can see the jump in Capital and Reserves in the same month. @ Shay Begorrah On pensions, given the current farce of a system where an individual like Peter Sutherland can draw a pension over the past 30 years in respect of a short period in a public office, an equitable system would provide for a decent State pension for all citizens and NO other pensions would be paid by the State to ANYONE or tax breaks provided. Enda Kenny and Micheál Martin will collect 3 public pensions each, while the State pension is less than a third of average income. So if people want to save additionally, that should be up to them, without tax breaks. Governments have become reliant on private savings in search of security. However, the commitments of unfunded pensions have mushroomed because future costs are viewed as not really costs or for someone else to worry about. There is also the reality that the people who are in charge will scrounge what they can from the system an feather their own nests. Is there not enough eveidence of that? In Portugal, the newspaper Correio da Manhã criticises the long list of politicians who are receiving pensions while still active in their careers: These payments are being justified with the fact that these politicians have served the state for more than 12 years (some, however, only more than eight). But this argument is not convincing. A large number of pensioners belonging to this group have not only never done the country any service worth mentioning, but have simply used their official position to build up a clientele network for their own purposes. The holders of public office must be recompensed after ending their functions according to the same conditions as any other employee, and only retire when their career situation or their age allows this. … These luxury pensioners are certainly in no position to push through the structural reforms Portugal so urgently needs. Seem familiar? @Michael Hennigan On pensions, given the current farce of a system where an individual like Peter Sutherland can draw a pension over the past 30 years in respect of a short period in a public office, an equitable system would provide for a decent State pension for all citizens and NO other pensions would be paid by the State to ANYONE or tax breaks provided. Sutherland is quite the character alright – he was a good fit for Goldman Sachs. A man of very considerable appetites. So if people want to save additionally, that should be up to them, without tax breaks. I certainly agree on the tax breaks and multiple state pensions. The idea of the “ministerial pension” is so odd, I wonder who cam up with it?. Ministerial positions are hardly jobs that reduce people’s future earnings potential after all (Former minsters Bruton and Dukes, take bows). I lack the skills to evaluate the social and economic value of the various private and public pension schemes, people do want to save for their retirement and pension funds seem to have judged the risks as badly as anyone else in the current financial crisis. The German situation where people end up with a very large proportion of the pension in cash savings is not ideal either. It is an unsolved problem. Anyone any superior knowledge on the bondholdings? Meanwhile, Spain is ‘unique’. That sounds familiar….. http://www.bloomberg.com/news/2012-07-17/german-government-asks-parliament-to-back-spain-recapitalization.html “The Finance Ministry in a letter dated July 16 asked parliament to support recapitalizations of as much as 100 billion euros ($122.8 billion) by the European Financial Stability Facility and the transfer of the program to the future European Stability Mechanism. The ESM won’t have preferred creditor status for loans to Spain’s banks, it said. “The financial aid is irrefutable to safeguard the stability of the euro zone as a whole,” the ministry said in the letter, posted on the lower house’s Internet site. Stripping the ESM of preferred creditor status is an “exception for this individual case and serves to preserve Spain’s access to markets.” @Grumpy “Anyone any superior knowledge on the bondholdings?” Not really I would say. It seems we will all have to wait until the German constitutional court president Andreas Vosskuhle translates the summit communique for the rest of Europe. All in his own good time. One wonders why Germany goes to any summit or why others go to attempt to agree matters with Germany. This is not fashionable withen trendy labour circles but people need to look at these Graphs. See figure 2 http://www.ons.gov.uk/ons/dcp171778_270487.pdf The British Isles is experiencing a Maltusian Dynamic with the carrying capacity of these Isles overshooting on a massive scale because of a both a deindustrialization and encouragement of immigration on a truely massive scale. A devastating one two knockout combination for the local populace. We are clearly seeing the manifesation of malthusian dynamics withen the UK these past 30+ years … although the roots of this malaise go back to the Labour goverment of the 60s. So electricity demand (a proxy for real consumption rather then monetary pound figures) is at 1998 figures….. Yet the population of England grew 3.6 million since 2001 population of Wales grew .153 million population of N.I. grew .125 million So we have a clear policey of deindustrialisation yet at the same time the goverments encourage immigration on a massive scale….. Something is just not right. The real standard of living is collapsing to Victorian levels by some measures as the carrying capacity of these islands overshoots. The decline in GDP withen the Baltics may not be so bad per head given the young people are moving west on a vast scale. The decline of Latvia’s population is Black Death like since 2001 I have still not got a breakdown of the methodology of GNP per head calculations published in the recent national accounts. They appear to post a improvement over 2010 figures which is simply incredulous. Southern Ireland is the most extreme of these large social experiments with GNP per head declining by 37,000~ to 27,000 + in 2012 (?) withen 5 years !! @MH,shay b. Interesting point about old sudsy alright.I was invited to a old school debate 3 years ago and the motion was ´if our leaders had had a jesuit education the economic crisis would have been less severe´.I nearly passed out when i saw that our illustrious old boy Peter Sutherland was the chairman,you couldn´t make it up.That is the trouble with these elites,they really have no shame or sense of morality and continue to bleed the system.Never made it to the debate though…. “Southern Ireland is the most extreme of these large social experiments with GNP per head declining by 37,000~ to 27,000 + in 2012 (?) withen 5 years !!” Think of Ireland as a lady who felt the need for breast implants and has now had them removed. Everything about the late Tiger was artificial. The curves are much flatter now. @Seafoid Did you get a gist of the “investment” thingy on the 6 oclock news. The powers that be clearly see Ireland as a sort of excess spillway for energy / capital / labour inflation deflation’s. In other words a war fighting zone remote from centres of operation. Of course the local construction pigs who have grown fat on this war bounty arrangement will finally be paid off for their compliance. As Steve from Virgina would say we are a mere conduit for capital -people are mere cannon fodder. All of the transport stuff will go into roads (850 million I think) So we hock the state assets in return for a bit of EIB leverage perhaps…. What a dirty deal with these wildly corrupt PPP schemes. We have more friigen roads per population then anywhere else in Europe – a lack of roads did not cause our depression – it was a openness to capital /energy flows which this policey will actually accelerate further. Southern Ireland population Y2002 :3,917,203 Y2007 :4,239,848 Y2011 :4,581,269 More Roads – I want to cry. These guys profess a ignorance of basic energy dynamics. Basic physics i.e. energy is the ability to do work. I continue to believe we are withen that 1820s moment – only another 20 years for a Biblical disaster. I can’t wait…………………….. FYI on Herr Professor Un_sinn 07/17/2012 Professor Propaganda Is German Economist Exacerbating Euro Crisis? By Sven Böll Germany’s Hans-Werner Sinn is fighting desperately against the euro rescue. His controversial theories fill the pages of newspapers for days at a time, but his answers are often simplistic. A growing number of his colleagues are distancing themselves from the influential Munich economist. http://www.spiegel.de/international/business/hans-werner-sinn-s-simplistic-euro-crisis-theories-divide-german-economists-a-844590.html 10/05/2011 Six Decades of Quality Journalism The History of DER SPIEGEL The first issue of DER SPIEGEL appeared on Saturday, Jan. 4, 1947, in Hanover, Germany, as the successor of a magazine called Diese Woche or “This Week.” The original magazine was modelled on American and British newsmagazines and had been conceived by members of the British military government shortly after World War II as an outlet to at long last provide the German people with “objective news” once again. A handful of young German journalists led by Rudolf Augstein took this call for critical journalism literally, and didn’t spare the Allies either. The government in London protested fiercely against this form of “enlightenment,” as did the three other Allied powers. After just five issues, the British rid themselves of the troublesome paper by handing Diese Woche over to the Germans. Rudolf Augstein, to whom they granted the publisher’s licence, renamed the magazine DER SPIEGEL (“The Mirror”) and became its editor-in-chief and publisher. The first issue appeared in January of 1947. http://www.spiegel.de/international/six-decades-of-quality-journalism-the-history-of-der-spiegel-a-789853.html @DOD Der Spiegel quote from Sinn. “Our children will be forced to go to southern Europe and get our money back,” he warns. As somebody who has taken up a constitutional court challenge against the ESM, he might wish to consider what article of that constitution would sanction the task he foresees for children of Germany. Don’t understand the problem with Sinn Lets follow his advice and break up this sick experiment on peoples lives. The Euro is a mechanism to accerlate the destruction of Europe via wage arbitrage and a lack of a clear chain of command which is a deliberate policey to depoliticise all matters of consequence. Anybody who has any real feelings for the place would want to see it finish so that we can save at least some vistages of civilisation. PS simple question ? What the median share of the GNP per head, per worker. I bet its quite striking What to Make of Finnegans Wake?July 12, 2012 Michael Chabon. Like many admirers of the work of James Joyce, I had imposed strict terms on that admiration, and around the work I had drawn a clear ambit, beyond which I was unprepared to stray. Ulysses and “The Dead”: crucial works, without which life was something seen through a sheet of wax paper, handled with gloves of thick batting, overheard through a drinking glass pressed to a wall. Between them those two works managed to say everything a pitying heart and a pitiless intellect could say about death and sex and love and literature, loss and desire, friendship and animosity, talk and silence, mourning and dread. Then there were “Araby,” “A Little Cloud,” and “Ivy Day in the Committee Room,” each a masterpiece, endlessly rereadable, from which I had learned so much about short stories and their deceptive power; one can learn a lot from all the stories in Dubliners, even the sketchier ones: about point of view and the construction of scene, about the myth of Charles Parnell and horse racing in Ireland, about the pain of grief and of missed chances. http://www.nybooks.com/articles/archives/2012/jul/12/what-make-finnegans-wake/?utm_medium=email&utm_campaign=July+17+2012&utm_content=July+17+2012+CID_c961f75ad3676369a5d91c014075d4ae&utm_source=Email+marketing+software&utm_term=What+to+Make+of+Finnegans+Wake Will the children of herr doctor sinn be in suits or camo? Will they come in on boeings or via Junkers troop transports? What a gibbering idiot, with a tin ear for his own historical context. Fool. JR, I presume Herr Sinn means the German youth will go via the traditional route through the Ardennes. We imported 1.797 Billion euros of fuel between Jan -April 2011 We imported 1.865 Billion euros of fuel between Jan – April 2012. The liquid fuel problem is not solved. This is More then our food imports !! and I am not counting Gas & Coal !! This is a dynamic of a third world country Whats wrong with these people in Goverment ? Have they not got a Altruistic bone in their fat bodies ? In the name of God – NO MORE ROADS. Every time somebody drives a car in Ireland a little piece of wealth dies inside. They are directing this juristiction,not as a country but as a vector for destructive global capital much like how a war machine operates. THEY ARE GIVING THE MONEY TO THE PIG MEN ,(The machines) AND BYPASSING THE POPULACE. http://www.youtube.com/watch?v=N9YU0hQEZ5M I see Parlon like machines everywhere ‘What is the probability that this entire story is nonsense? And that the ECB have not in fact changed their position’ – Well, there’s a lot of shuffling about, putting PR band-aids on the tarnished public perception of the Project – calls to increase the democratic ‘legitimacy’ of the Commission (though with a – quote – ‘figurehead’ of a directly elected president; they really are off-track & don’t even know it….) The ECB has, deservedly, come off as the real villain. To the extent that is not implausible for several countries to end up leaving due to a popular will to do so. Not certain, perhaps not even likely; but far more so than at any other time. Is this enough to make them do it ? As the horse has bolted, some minimal moves in that direction but only applied to future contingencies might be considered safe, & enough to dope the plebs a bit longer. @ All On the subject of articles in the WSJ, this commentary by the Governor of the Bank of France, Christian Noyer, is worthy of greater interest than that on the comments by Draghi. http://online.wsj.com/article/SB10001424052702303901504577460741943418980.html It has now been complemented by an extensive interview in Handelsblatt which, unfortunately, has disappeared behind a paywall. In it he speaks of a “banking union” rather than a financial one. The English language media have missed most of the nuaces in what he had to say, Reuters, for example omitting to mention the comment he made that limiting the union to systemically important banks – the current position of Merkel – would be pointless. Its coverage is, nevertheless, the best of a bad lot. http://www.reuters.com/article/2012/07/16/us-ecb-eurozone-draghi-idUSBRE86F06G20120716 Re- Dork It’s a bit like the Famine Relief Projects – Boundary Walls constructed a-top 3,000 foot mountains and the like. More worryingly, it could be another ‘kick-the-can’ – road and home-building was the medium through which the credit-bubble was conjured up – sustainability is never considered. Sure, the population can hit 10,000,000; by then and things will probably have worked out, and if not sure the current regime will be on their pension so it won’t matter… @ All Correction; Reuters did pick up the point about the need to involve all banks. @ All FYI (the WSJ article haviing disappeared behind a paywall). http://www.banque-france.fr/fileadmin/user_upload/banque_de_france/La_Banque_de_France/the-next-step-for-europe-is-financial-union.pdf @ DOCM I wonder how the Murdoch paywall experiment is going. I don’t think many people are paying to read agency articles on the Times website. @MARK Theres probally a bit of – give the local concrete Pig boys the ammo – they will blow it on domestic whores at least…….. Its the nature of bank debt – produce any broken glass endeavors to pay down already ,malinvested stuff. So you build more malinvested stuff on top of existing malinvested stuff. This madness appears to work when you can rip more fossil fuel stuff out of the ground but when you can’t its becomes obvious waste. We also cannot express true efficiency in our system as we can’t print base money which means any real savings would be expressed as a tax defecit……. The debt based system is a waste based system – it cannot cope with a true surplus. PS – I once slept next to one of those boundary walls at 3,200 feet or so……strange dreams all night. http://www.geograph.org.uk/photo/1958316 The cries of anguish……… Dying for something completly pointless I guess. The guys in charge want to crush all hope as then we are more easily controlable. http://www.youtube.com/watch?v=1feCThY2Eis “Whoever has the control has the power” @ All FYI a further very relevant recent intervention by Noyer. http://www.banque-france.fr/uploads/tx_bdfgrandesdates/Aix_2012_EN.pdf Re- Dork ”So we have a clear policey of deindustrialisation yet at the same time the goverments encourage immigration on a massive scale…..” I remember Enda in the Dáil last year saying, after a conflab with the IMF, say that the govt. ”have to make hard decisions about the size of the country…” And I wondered then & still do if population was what he was cryptically alluding to. At the time the big issue was the amount of vacant properties in the country, which was alleged to be something like 370,000 units; which was vehemently denied in some quarters. From general observation, most of the construction projects around Dublin that had been unfinished and derelict were some months later were returned-to; in a lot of cases the councils stepped in and gave them tenants. Go back to the early years of the 2000s and there were govt.-sponsored conferences talking about a ‘linear city’ stretching along the entire east of the country; from wexford to belfast, and a population of 10,000,000 by 2025 or thereabouts. I presume they’d been looking at certain engineered population-shifts China-wards. So is it a surprise that there is still a 70,000 p/a immigration rate in the current climate ? I don’t think current emigration necessarily makes this an equal circular movement – somebody here suggested that the vacancy-rate here was linked to emigration, which is patently untrue – there is a discontinuity in either/both the demographics of the migration polarity and the home-owning/renting/residing status of the variants. And the houses are being filled – say an average of three per home means a population growth of….how much ? Certainly more than the census. Which I quite openly didn’t co-operate with, so it aint that difficult. There are three reasons for govt.-sponsored immigration that I can see (I’m talking about the cold, hard reasons only) The good one – filling jobs that can’t be filled locally. Bad one # 1 – as an attempt to consciously alter the demographic to create subsidence under established wages and conditions, and to similarly ‘engineer’ change in other established consensus’. Bad one # 2 – to fill a deficit for a protected interest; namely a banking system with a lot of worthless concrete shells on it’s assets-list. @Mark The deindustrialisation agenda – goes back a long way. To the Club of Rome days I imagine. Silent Spring , On the Beech and Moonshots view of Earth influenced that cultural period. Houses are mere long lasting consumer goods and not a core wealth base such as technological energy capital. A truely sovergin people maximise wealth withen a clear juristiction – this is the reason for borders. Juristiction is therefore the most important of legal concepts. The market state construct sought to break this up because the banks could not make money from advanced nation states waging war on each other using Nuclear weapons. But this lack of internal commerce merely functioned to transfer actvity to China via the greatest rip stuff out of the ground fest ever conceived & executed dwarfing the 19th century European experiment. Anyway I am sick to me teeth of these debt based system. We will go back to a non usurious system better suited to peoples needs – but unfortunetly we must experience a dark age first as it is the nature of things. Just sit back and “enjoy” the Darkness. As Steve from Hicksville says – the Mad Men are in control. They will do their worst on us and are capable of anything. @Mark The deindustrialisation agenda – goes back a long way. To the Club of Rome days I imagine. Silent Spring , On the Beech and Moonshots view of Earth influenced that cultural period. Houses are mere long lasting consumer goods and not a core wealth base such as technological energy capital. A truely sovergin people maximise wealth withen a clear juristiction – this is the reason for borders. Juristiction is therefore the most important of legal concepts. The market state construct sought to break this up because the banks could not make money from advanced nation states waging war on each other using Nuclear weapons. But this lack of internal commerce merely functioned to transfer actvity to China via the greatest rip stuff out of the ground fest ever conceived & executed dwarfing the 19th century European experiment. Anyway I am sick to me teeth of these debt based system. We will go back to a non usurious system better suited to peoples needs – but unfortunetly we must experience a dark age first as it is the nature of things. Just sit back and “enjoy” the Darkness. As Steve from Hicksville says – the Mad Men are in control. They will do their worst on us and are capable of anything. @Mark The deindustrialisation agenda – goes back a long way. To the Club of Rome days I imagine. Silent Spring , On the Beech and Moonshots view of Earth influenced that cultural period. Houses are mere long lasting consumer goods and not a core wealth base such as technological energy capital. A truely sovergin people maximise wealth withen a clear juristiction – this is the reason for borders. Juristiction is therefore the most important of legal concepts. The market state construct sought to break this up because the banks could not make money from advanced nation states waging war on each other using Nuclear weapons. But this lack of internal commerce merely functioned to transfer actvity to China via the greatest rip stuff out of the ground fest ever conceived & executed dwarfing the 19th century European experiment. Anyway I am sick to me teeth of these debt based system. We will go back to a non usurious system better suited to peoples needs – but unfortunetly we must experience a dark age first as it is the nature of things. Just sit back and “enjoy” the Darkness. As Steve from Hicksville says – the Mad Men are in control. They will do their worst on us and are capable of anything. PS Its quite likely the Banks wish to push down the GNP per person to fill those houses at all costs. Creating a sort of European Bangladesh where people have no options but survival. The people voted to give up what little remained of their sovereignty – the banks assume perhaps quite rightly we are fair game although shooting people in cages of their own making is not considered good sport. This is really a extension of warfare fought withen the monetary sphere. People as cattle ,as conduits. I can’t begin to describe how dark this period is. Its Blade runner without the technology. They wish to push this country into surplus despite massive increases in population and lack of resourse soverginity. The lack of debate withen this blog of the catostrophic Easter Island like GNP per head figures speaks volumes. Irish people without a even mythological historical construct…… drifting in a monetary ether. DEAD MEAT. @ All The full text of the Noyer interview is now available on the Handelsblatt website, with references to the background for each topic. One could well view as the way that a highly-placed French official would like to see matters develop over the coming months. Whether the new government is on the same wavelength remains to be seen. http://www.handelsblatt.com/politik/konjunktur/geldpolitik/christian-noyer-im-interview-verbindung-zwischen-banken-und-staaten-muss-durchtrennt-werden/6886472.html Comments are closed.