Fishamble: The New Play Company are presenting a new play. ‘Guaranteed!’, by Colin Murphy which dramatises the events leading up to and the night of the 2008 bank guarantee. You can read about it here
Colin is a journalist, documentary maker and researcher. People may know his columns from the Independent. In 2011 Fishamble launched ‘Tiny Plays for Ireland‘ with the Irish Times.
One of the plays that came in was Colin’s mini version of the guarantee. He came up to us afterwards and said he reckoned he could do a much more substantial work based on primary, secondary and interview sources. We said let’s go for it and Colin has done a fantastic job – he’s really put the work in.
We had a reading of it a couple of weeks ago and every scene that was
questioned Colin supported from a wide range of first hand interviews.
Colin has been scrupulously fair in not imposing hindsight on the people involved, so you get what it feels like to be in the room trying to make decisions in real time with the information you have. It’s funny too, in a tragic sort of way.
All the shows will be followed by discussion and we have a great line-up of various people on different nights with whom many readers will be familiar, including Kieran Allen, Suzy Byrne, Sarah Carey, Donal Donovan, Constantin Gurdgiev, Brian Lucey, Jim Power and many more. Bloggers are of course welcome to chip in with their insights.
The production has a great director, cast and crew. We’ve kept the prices down to and austerity friendly e10/11 and we’re doing it in a pop-up, script in hand way, which we hope reflects the idea of real people wading through the records trying to make sense of what happened.
I’ll be chairing a number of the discussions, so please feel free to stick in questions I should ask in the comments below.
19 replies on “From Gavin Kostick: Fishamble Presents ‘Guaranteed!’ by Colin Murphy”
The “Aesthetic Turn” in Irish Political Economy tbc.
What role did the broadsheet media and particularly the Irish Times play in the inflating of the property bubble.
What role did the “soft landing” economists play in the inflating of the property bubble
“The Fall of the Celtic Tiger ”
” Taking into account the very substantial (but unknown) costs that would otherwise have been incurred,the guarantee decision of 29 September,despite it’s huge cost consequences, nonetheless may have been the ‘least worse’ solution available. The granting of the guarantee was not the ‘big mistake’ that caused Ireland’s financial crisis-the crisis was due to very serious errors of judgement made by many institutions and individuals long before end-September 2008″
” The property market crisis resulted from the collapse of a classic asset bubble. The bubble involved the massive overvaluations driven by the general view that property represented the fastest and easiest way towards wealth and that, at worst,a ‘soft landing’ for the market would result.”
Below is the link to the elementary property valuation error that bankrupted the country;
Also below is the link to David McWilliams in 1999 calling the property bubble;
Maith thú Gavin. Looks like a great bit of work.
It is very worthwhile to steer the analysis away from the spindoctors.
I always wonder how the history of this critical moment will be written.
Property taxes alone are dangerous in a downturn. Alabama and other poor US states are cutting back on essential services because house prices fell a few years ago. . You would have to give the regions a cut of income tax and corp tax to get a decent system going .
So you want intelligent, erudite legislators in the Dail to act in the national interest but you also want them to bring home the pork to underprivileged constituencies, defined usually to be your own.
The best example of an intelligent politician and administrator but looking after home base in the last generation was CJH.
Questions to be asked:
Why did Brian Cowen insist on CFDs not being taxed when he was Minister for Finance?
After Northern Rock’s collapse in November 2007, what alarms bells were rung in the Central Bank, the Department of Finance and the Banks themselves in March 2008 – dubbed the St. Patrick’s Day massacre – with the collapse in the share price of Anglo Irish Bank?
How did the Taoiseach of the time, who had been the Minister for Finance up to May 2008, be so ignorant of the states of the banks in September 2008?
During the summer of 2008 the illegal Anglo Irish share support scheme, involving golden circles, was an open secret, how did the Minister for Finance, the Financial Regulator and the Central bank manage to remain in such blissful ignorance?
How well informed were the Central Bank and the Financial Regulator about the Bed-And-Breakfast arrangements between Anglo Irish Bank and Permanent TSB?
Fishamble presents ‘Guaranteed!’ by Colin Murphy
I knew this boy when he was a pup 🙂
“So you want intelligent, erudite legislators in the Dail to act in the national interest but you also want them to bring home the pork to underprivileged constituencies, defined usually to be your own.”
They can do it in other countries- local power backed up by transfer payments. There needs to be transparency, accountability, competence. How would you rate Ireland on those 3 at the moment?
Limerick is a great example. How much money has been ploughed into Moyross ? How are the results?
We are a creative people. I was sure that great works of art would be produced to ease our pain. I had not seen this when I made the comment in Ireland – Tenth Review.
“There was a time when we used sardonic wit to ease the pain, producing great writers like Joyce, Swift, Beckett, Behan and Wilde who was a bit on the lighter side but still perceptive. We are now moving out of orthodox economics into Malthusian territory.”
There was a time when Limerick was a cradle of Celtic civilisation.
There is a Kerry joke.
Did you hear about your man from Tralee. Sure didn’t he go into Cruise’s in Limerick for lunch. They served him lunch with two potatoes on the plate. He cuts into one potatoe and shouts at the waiter “They are done you can take them up now.”.
Thanks for the above.
A number of the points picked out John Corcoran and What Goes Up are raised in the play so I should be a able to work them into the discussions.
Belated thanks for the above comments.
As Gavin says, some of these issues are covered in the play. The glaring omission is CFDs – both the Cowen row-back on taxation and the whole Quinn saga. The latter posed legal complications but also would be fiendishly difficult to stage as a subplot (alongside all the other fiendishly difficult stuff).
However the post-show discussions each night are an integral part of the package – the play can only tell a part of the story, of necessity a simplified one, and the discussions allow us to open it up to other aspects of the guarantee ‘story’, whether that be through the guests or the audience.
I’ve no doubt this discussion will be contentious – presumably some will argue forcefully that choices we’ve made in the play are wrong – but I hope those discussions will be invigorating and worthwhile of themselves.
Two links that may be of interest:
a nice piece by Carol Hunt in today’s Sunday Indo on the project:
And a trailer for the play, by Luke McManus:
” The Fall of the Celtic Tiger”
“However, total lending to the property and construction sector by the three biggest Irish banks rose much more sharply,from 36.1 billion to 157.8 billion in the same period. Table 4.3 shows the extent to which the property boom metamorphosed into a predominantly builder/developer bubble between 2003 and 2008. By 2003, Anglo, which specialized in loans to this sector, had captured a sizeable chunk of the profitable fast growing builder/developer market.——Total lending to the property and construction sector by these three banks dwarfed mortgage lending.”
My question is –what role did feudal Irish commercial property lease law i.e. upward-only rent reviews tied to very long leases, have on the commercial property bubble and reckless bank lending to this sector.
No other eurozone country, or any other country in the world, has this feudal lease law.
Sean Fitzpatrick’s Core Philosophy
Extract “The Fitzpatrick Tapes” by Tom Lyons and Brian Carey
“Our exposure is not to the building,it’s to the money that comes from leasing it”, he said. “If the value of the property goes down,it dosn’t matter. We still get our loan repaid.” Fitzpatrick was nothing if not consistent in this,one of his core philosophies”
If you examine Sean Fitzpatrick’s core philosophy,if the property was worth zero it didn’t matter, because he had the rents coming from the Irish feudal commercial property leases i.e. upward-only rent reviews tied to 25/35 year leases. No other country in the eurozone, or the rest of the world tolerated this feudal lease law.
Reckless Irish banks lent tens of billions against these ruinous leases,not the properties themselves, and created the greatest commercial property bubble in the history of mankind. When this bubble burst, it bankrupted the banks and the sovereign
What role did Sean Fitzpatrick’s core philosophy play in bankrupting Ireland?
Below is the most important letter ever written to an Irish newspaper re property;
Professor Neil Crosby’s comment on this letter;
The analysis may be simplistic but unfortunately it is not flawed. Banks
ask valuers to tell them what the market value/exchange price is at a
point in time and then lend vast amounts over time based on that simple
number. The surveyor gives them that simple number and do not think it
is their job to tell the banks that the question they have been asked is
stupid on its own and what they should have asked for is the underlying
value. It was obvious in 2005 and 2006 that prices in the property
market were higher than could be sustained by any rational cash flow
analysis. But in a culture that rewards individuals for short term
performance rather than longer term perspective, it was in neither the
bankers’ nor the valuers’ interests to stop it. I cannot see anything in
what the UK regulatory authorities have proposed that makes me think
they understand the role of property valuation in driving asset bubbles
and will prevent it all happening again sometime in the 2020s.
Neil Crosby Professor of Real Estate and Planning University of Reading
Neil has been Professor of Real Estate at the University of Reading since 1994 having been previously Professor at Oxford Brookes and lecturer at Reading and Nottingham Trent Universities. Before that he was a practising valuation surveyor in a combined residential and commercial property private practice firm based in Nottingham. He specialises in commercial property appraisal and the commercial Landlord and Tenant relationship and has undertaken a series of major research studies funded by the UK Government and the UK property industry in these areas. In 2002 he was awarded the International Real Estate Society’s annual achievement award for his work in real estate research, education and practice. He has published well over 100 papers on the various topics listed above and the third edition of his textbook on Property Investment Appraisal with Andrew Baum was published in 2007.
In his memoir, Back From The Brink, then UK Chancellor of the Exchequer Alistair Darling recounted his surprised reaction to the Irish move: “It meant the Irish Government was effectively underwriting its banks in a way no other country in the world had done.” He continued: “I knew full well that if the Irish Government’s bluff was called they would be bankrupt. It was a promise on which they could never deliver.”
Why did Brian Cowan and the FF cabinet decide to bankrupt the country?