Raking Over Old Coals

A memo prepared in November 2008 by Merrill Lynch in advising the then government on the developing banking crisis has been released following an FOI request from Sinn Féin.  The 45-page memo is here.

Some government statements issued around time include:

  • 30.11.08: Announcement in relation to Covered Institutions
  • 14.12.08: Statement by the Government on the Recapitalisation of Credit Institutions
  • 21.12.08: Government Announcement on Recapitalisation
  • 15.01.09: Statement on Nationalisation of Anglo Irish Bank

It is an interesting read but has anything been unearthed aside from further evidence that the scale of the banking bust was massively underestimated?

84 replies on “Raking Over Old Coals”

old coals maybe but the coals of a socioeconomic conflagration unparalleled in modern irish history.

Maybe time to consider new coals!

Jim Power on the topic of ethical banking.


FYI (courtesy of the [German] Centre for European Policy) the initial draft of the intergovernmental agreement on provding the money for implementation of of the SRM/SRF, the EU legislation (by way of Regulation i.e. directly applicable in the legal order of all member countries) on the operation of which has now been agreed.


As it has been made abundantly clear that the Irish banking and regulatory establishment was not up to the task at a national level, maybe a collective effort at EU level, however circumscribed, will remedy the situation.

Merrill comes very close to a deposit-selling moment — slide 6 of the October 2008 presentation. Selling the Seanie and Fingers deposits was going to raise tiny amounts of money, not clear how it would help offset the losses.

Old coals but it’ll probably be the same next time.
It’s always reactive. Zero resilience.

@Frank Galton,

“Merrill comes very close to a deposit-selling moment ”

You mean like close to a Brian Lucey deposit-selling suggestion?!

Naw, they haven’t got anyone like Brian in there, surely?


David Halberstam in the “The Best and the Brightest,” his 1972 scathing indictment of the Washington policy makers who crafted and escalated the Vietnam War, asked: “If they were so very smart, how could they have got it so wrong?”

He highlighted “the difference between intelligence and wisdom,” and said “true wisdom…is the product of hard-won, often bitter experience.”

After years of delusion, it’s striking how stupid or in denial so many people in key positions were.

There should have been no surprise in September 2008 and despite the crisis overseas, the working assumption among the Irish ‘experts’ was that it would soon blow over.

A year before Lehman Brothers collapsed, Northern Rock announced that “extreme conditions” in financial markets forced it to approach the Bank of England for assistance. The announcement triggered the first run on a British bank in more than a century.

In February 2009, exactly 2 years after the subprime crisis broke out in the US, the Irish unit of Pricewaterhouse Coopers (PwC), the biggest of the Big 4 accounting firms, delivered a report on Anglo Irish Bank to the minister of finance.

It said:

“These annual impairment charges were €2.3bn and €3.0bn respectively per annum under the two scenarios for the years ended 30 September 2009 and 2010. The two PwC impairment loss scenarios exceeded Anglo’s worst case impairment loss scenario.”

Jones Lang LaSalle valued a sample of 160 properties held as security in relation to the top 20 land & development exposures on Anglo’s books.

Anglo Irish Bank reported a loss of €12.7bn for the 15 months to the end of December 2009 – the largest loss in Irish corporate history – after charging €15bn to cover bad debts.


How many of the former irish government and the management of the Irish banks mentioned in the ML report,

are dead or in prison ?

I do not know, whether anybody of you read “In retrospect” from Robert S. Namara, one of those “best and brightest”.

He wrote in the preface “We of the Kennedy and Johnson administrations who participated in the decisions on Vietnam acted according to what we we thought were the principles and traditions of this nation. We made our decisions in light of those values. Yet we were wrong, terribly wrong. We owe it to the future generations to explain why.

And then he goes on to still trying to partially whitewash terrible mistakes, which did cost millions of lifes of innocent vietnameses.

The garbage today in power in Washington is even vastly inferior.
And then you look at the loonie Mc Cain, and one heart beat from presidency Palin, and it gives me the creeps. If Russia would be just a big gasoline station, then those american imbeciles are the folks strutting around there and twitching matches.

In physics I can torture billions of DRAM cells to death and can hammer on many metal rods until they brake and I get good statistics. Nobody gets hurt and nobody will sue me, unless I do that over their bedroom on saturday night : – )

In economics and politics you better milk the existing few cases for all you can learn from them, because failure is written in blood.

And as far as we know, so far the financial sector has managed to produce some crisis every 10 years and some severe depressive wave every 40 years. Next time I will probably just wag my crutch and yell ” I told ya so”

The Risk manager of Generali in Ireland was fired April 2007. From then on some in the Irish government knew that something is burning.

Reading the old documents with those questions in mind: when could who have known what

FYI and interesting Bloomberg report.



“Draghi said the compromise contains “a clear reference to enhanced borrowing capacity from the market by the fund. We’ll have to clearly see in detail what this means.” ”

In short, will the EU banking fire brigade have sufficient water pressure in the hose?


@Michael Hennigan

Don’t be so hard on ‘the best and the brightest’ Michael.

Observe the wonderful states of affairs presently in Iraq, Ireland, Afghanistan & Libya.

Wonder who started that meddling ‘little green flag affair’ over in the historic region of the Black Sea? Mums the word …


Bi curamach! You might be ‘outed’ – said prof. has an issue with anonymity!

Ireland 2/5 vs Holland: 09.00am Hibernian time.

Bond. Eoin Bond to return to the blog 4/5

@Prudent Hans

Irish upper-echelons (including bankers) don’t do ‘time’; time (like taxes) is for the little people. Still having those nightmares about Kursk? Not to worry – Blind Biddy is in Kharkov …. Germany is safe … (for the mo)

final text of the day from Blind Biddy:

‘Speaking of coal! I still remember the half bag o coal that Minister Mary Hanifin pilfered from my disability allowance to give to the bondholders. The x_minister fully deserves a ‘Fig Leaf’ – only the fifth ever awarded.

I’m keeping a steely eye on these people:


The presence of Russian tanks on Ukraine’s borders and closer will ensure a little more collegiality in the EZ. Clearly it has had more immediate impact than bust banks in a few troublesome little countries.

Even EZ bureaucrats will know that it is no longer expedient to let the water pressure drop, no matter what thier economic ideology tells them.
When the bear is hunting is no time for the deer to be making enemies amongst the herd.

@ JR

It is, indeed, an ill wind that does not blow some good not just in relation to the banking union but also with regard to the common interest the EU has, or should have, in the matter of energy supply, an interest blown apart by Schroeder and Germany’s, and his personal, involvement in the Nord Stream gas pipeline. There is also IMHO a sudden return to a grasp of the reality – especially in Germany – of the dependence of Europe for its security on the good old USA, with all its faults.

Post the deal with the European Parliament, the haggling over the share-out of the banking union costs is only just beginning.


Unfortunately the soft landing economists learnt the hard truth ten years too late;

Seeing we are discussing legacy debt issues, how are our friends in Iceland getting on?

@ francis: “If Russia would be just a big gasoline station, then those american imbeciles are the folks strutting around there and twitching matches.”

Nicely put. Do us western folk have even the faintest understanding of the Russian psyche? Seems not.

Putin and his mates are sleazebags. But so are the Saudis. Now there IS a nation which IS a genuine Gaz Station!

Someone advised me to read Bulgakov’s, ‘The White Guard’ – said it would fill in some gaps about Ukraine.

Coals? Fukishima fuel rods, more likely!


Le Canard Enchaine had a piece on Fukushima recently . Not unlike the EZ mess.

“like Dali’s soft sculptures, slow catastrophes have a certain beauty. 3 years after the tsunami, everything proceeds relentlessly . The melted reactors are still dangerous. They have to be cooled continuously. With water. Which becomes radioactive. It is collected and stored in massive reservoirs. There are now 1200. A new one is built every 2 days. Sometimes water escapes.

Every day between 3000 and 4000 people work on the site of the plant. This will go on for 40 years. In the forbidden zones where 210,000 people used to live, there are 10,000 people scraping radioactive material into bags. Many of them are yakuza. For these friendly gangsters the business is very lucrative”


Ireland in first vs Holland: Twenty20 World Cup

189 for 4: Superb stuff and lookin good. Break time ….

How intriguing. A post of mine noting that we now seem to be arguing about the value of market related deposit transactions rather than their existence seems to have vanished….

Disaster looms – Dutch batsmen on brilliant steroids … pardon the synecdoche … ghut fur dhomme! …. one of the greatest run chases of all time in 20/20 … they have done it in 13.5 overs. Incredible!

The Netherlands go through. Congratulations. Absolutely brilliant!

Irish on way home. I’m in shock …..


prob an anonymous post – don’t fall out of your perambulator!

Could everybody drop a short statement, what you took from the “Spiegel International” link from D O D above?

@francis what to say,its Friday sunny day trying avoid scraps its pointless,Pearse Doherty from SF is basically the official opposition spokesman on Finance, who does outstanding work.Cant imagine FF pushing for doc.’s or any inquiry.The ‘shinners’ provided the doc.’s linked above.
What is/was the reaction in Germany to the court decision ?
The seminar is number 2 above,still trying figure out implications for Irish banks,would appear retroactive recap is dead.29 out of 30 US banks just passed their stress tests.

@ JG

The two key questions still outstanding as identified in the Bruegel piece!

“First, the crucial question of the backstop to the Single Resolution Fund is not yet settled. The political agreement reached by the EU leaders includes a commitment to put in place a credit line to back the Fund but neither the nature nor the timing of such backstop are clear. Even if the build-up of the Fund is accelerated, as it has been agreed this morning, a resolution mechanism still absolutely needs some form of public backstop to be fully credible and ensure that confidence is preserved. This issue should therefore be dealt with as soon as possible.

Second, the scope of the SRM must also be made clearer. Today’s press release from the Commission says that “the Board would prepare resolution plans and directly resolve all banks directly supervised by the ECB and for cross-border banks” while “national resolution authorities would prepare resolution plans and resolve banks which only operate nationally and are not subject to full ECB direct supervision, provided that this would not involve any use of the Single Fund.” From this text, it is not clear whether the Board would have a say in the resolution of the second category of institutions mentioned, apart from the cases in which the resolution fund is used. However, a proper Banking Union should have no segmentation between central and national level in the management of resolution function. Moreover, according to the text on supervisory mechanism, the ECB is formally responsible for the supervision of all banks in the euro area and can take over the direct supervision of any banks that it is not directly supervising already, if needed. This should be made possible also in the case of resolution, to avoid a situation in which all banks are equal vis à vis supervision but not vis à vis resolution.”

On the first cf. Draghi’s comment I linked to above.

@DOCM specifically for you!

The President of the Ifo Institute, Hans-Werner Sinn, regrets the decision taken by Germany’s Constitutional Court on the ESM euro bail-out fund. “The Court is setting the bar for unconstitutionality too high. Unconstitutionality is only assumed once the Bundestag has lost its control over the budget entirely”, said Sinn on Tuesday in Karlsruhe. The Federal Ministry of Finance will at least now have to earmark expected ESM payments in advance in the budget and cannot book these payments ex post as an amendment or an emergency budget measure.

The ruling also has implications for the planned banking union, noted Sinn. The Court excludes any kind of payment automatism with collective funds. The Bundestag must decide upon each payment case-by-case. This represents a prohibition of the automatic support of banks with ESM funds that the EU Commission and the ECB have been aiming for. Moreover, according to the Court, so as to retain its veto power in the ESM, the Bundestag must block any expansion of the ESM to new members unless the rules are changed to preserve this veto power. In this respect, Sinn believes that the Court has “driven an important stake into the ground”.

The Court also excludes the possibility of joint and several liability for payments into the ESM. As a result, Germany will not be obliged to inject more equity into the ESM if other guarantors do not fulfil their obligations.

Unfortunately, the Court fails to recognise the importance of the Target balances between European central banks in its ruling. The Court explains that any complaint should have been lodged one year after the set-up of the Target2 system in 2007 at the very latest, and that the plaintiffs did not provide sufficient justification of the liability risks. Prof. Sinn regrets this position since it is a fact that the ECB has made half of the Eurosystem’s stock of central bank money, or around 600 billion euros, available as extra funds to banks in the six crisis-afflicted countries in return for poor-quality collateral. This indirectly makes the Bundesbank the biggest single creditor of these banks. Now the banks in the crisis-afflicted countries have to be bailed out with public money to safeguard the cash that they have already been loaned. This all happened after the time limit for filing a complaint had already expired.

Prof. Sinn noted that today’s statement did not affect the ruling on the bail-out promise of the European Central Bank made in the framework of the OMT, since this part of the proceedings will be dealt with separately. The Court conjectured a month ago that the European Central Bank overstepped its mandate and announced that it would call upon the European Court of Justice to hear its opinion as to how the OMT could be modified so as to curb this “usurpation of power”.

“How many of the former irish government and the management of the Irish banks mentioned in the ML report, are dead or in prison ?”

Dead at the hands of the state ? A little extreme, no ?

It was not in the goverment’s, oligarchy or banker’s interest to recognise the scale of existing or future collateral collapse related to property value. It was of vital importance to all taxpayers, but who could care less about them, they are easily spun.

I distinctly remember some of my relatives who work for the national gov’t, Dublin Corporation and as teachers telling me that they were being told by TDs’ and their respective managements, that if the banks went into examinership (receivership) their pensions would be toast. The FUD factor as perfected by IBM was used to good advantage by our cute hoors. By the way FUD stands for fear, uncertainty and doubt, not effed up Dail.
As we approach the 100th anniversary of 1916 there seems to have been little improvement in our attitude to bad government, aversion to change, gullibility, naivete and as they sum it up in Kerry ” fot was gud enuff for me Granda shud be gud enuff fer me”. We are beyond redemption we can only hope there will be justice after life.


“Dead at the hands of the state” was definitely not implied by me.


I would say, after the preliminary ESM ruling in September 2012, that was pretty much as expected.

Originally it was planned that a small group of about 10 folks of the standing finance comitee would make ESM decisions, small enough to be confidential, because we do not trust one finance minister to decide on 200 billion alone, not even Wolferl Schäuble.

But that small group solution was found to have constitutional problems, I don’t know in detail

Spiegel International is NOT a reliable source

When I looked at D o D’s link I wondered, why I have not seen this. I do read the Spiegel Online on a daily basis, and that would have clearly interested me.

The point is, as a German reader I don’t see this story.

Even searching the Spiegel site for the author name (suchbegriff=Steffen+Winter) It doesn’t show up! And there is of course no German version.

To the content

1. The NPD is a right wing party, which sits in one or two local parliaments, but not in the federal. There have been attempts to get them abolished by the constitutional court, but one failed miserably for lack of untainted evidence, on a second one currently prepared.

The opinions, whether that would pass some well justified hurdles for such an act, differ, a lot.

The good thing about extremist parties in Germany, on the left and right, is, that they have a strong tendency to self deconstruct, republikaner, DVU, what haven’t we seen, and on the federal level the NPD is at the 2% level, no chance to get into the Bundestag. This Apfel guy was since that also eliminated (politically !) by his own party.

2. “received instruction financed by German taxpayers. Party members appeared at events hosted by the Konrad Adenauer Stiftung, the German political foundation affiliated with Chancellor Angela Merkel’s conservatives”

What did they do?

They held a conference, trying to bring along the German view of parliamentary democracy, like not deciding by street violence or fist fights in parliament.

On what grounds do you exclude members of a parliament party from listening in? Like “you are a lost case anyways, based on our decisions”? or what? Shouldn’t that be the decision of the Ukrainian organs?
Same goes for the GIZ.

As far as I know, the KAS is pretty careful to not get tainted with foreign lunatics.
What I read in the FAZ sometimes ago, they even disinvited Petr Mach, the guy who runs http://www.money-go-round.eu/ and was an adviser to Czech president Vaclav Klaus, from being a speaker at one of their events.

The way Spiegel International is construing this as “indirect-berlin-support-for-ukrainian-right-wing-extremists-svoboda”

I find not just severely misleading but downright demagogue.

And they do such things repeatedly, I remember being asked to comment on some weirdo stuff of them before, like eastern German pensioners dying 2 years earlier after Agenda 2010.

So please be careful with this source

John G
Final running order is here : http://brianmlucey.wordpress.com/2014/03/21/esrc-seminar-on-people-risk-in-financial-services-final-running-order/
This is one of five planned seminars on people risk – areas such as aircraft safety, health, financial services etc are planned. The next one is in the autumn in Bonn. Its a multinational multiinstitutional crew organizing it but led by TCD and Nottingham business schools.
And its FREE. Even with soup and all…

@Brian L thanks Brain looks like a great day out very timely given the above.I would be very interested in Mary’s paper too,all best with it.
@DOCM just having bit fun,it’s good news but simply pointing out quite a few significant hurdles to go,Jens speech is terrific.
@Francis thanks it’s been well covered by WSJ and FT,interested in the reaction in Germany to mutalizing the debts off the bad banks,or ahem the first step towards “Eurobonds”!

@ JG

From Weidmann’s speech which I agree is up to his usual standard (and that of the Bundesbank).

“But while there is room for improvement in Germany especially when it comes to the efficiency of its services sector, the fact is that European mark-ups are high in general, compared to the US, for example. It is therefore high time to fully harness the forces of the market for Europe, by making the most of its main catalyst for competition and growth, the European single market.

In his report to the European Commission, former Commissioner Mario Monti estimated the potential growth effects of creating a digital single market, which is largely services-based, to be about 4%, on a par with the gains made since 1993. Further benefits would ensue from a reduction in the vast number of exemptions in the services directive.

Reforms that strengthen competition in the services sector therefore hold the promise of delivering stronger and more balanced growth. And more balanced growth is likely to translate into a moderation of the current account as well.”

As this is a point that I have been banging on about for years, I am not going to disagree. Indeed, IMHO the major error with regard to the introduction of the single currency was that the level of single market integration in services, and especially financial services, was not sufficiently advanced. That in the financial services sector has actually gone backwards.

Where I part company entirely with the analysis, however, is with the claim that other countries are inviting Germany to reduce her level of competitiveness by paying increased wages. What the country is being asked to do is to stop exploiting a self-created low wage sector. Luckily, the SPD, now in government, agrees although there must be a question mark over the means chosen to correct the problem i.e. that of a generalised minimum wage in the particular circumstances that apply to wage-setting in Germany.

@ JG

On the points raised in the Bruegel paper, the main question posed is “when is a backstop not a backstop?”.

Eurointelligence set out the conundrum neatly today in the following terms.

“Before we cite the details of this agreement, we would like to highlight why a backstop is critically important. A backstop is what transforms a fund that can deal with a single bank into one that can backstop multiple banks at the same time. A backstop is what renders such a fund viable during a financial crisis. The Federal Deposit Insurance Corporation, the US resolution fund, is in many ways similar to the SRM, including in terms of its overall budget size, but unlike the SRM it enjoys an implicit backstop of the US federal government. When it takes over a bank, this implicit backstop is critical to the success of the operation because it is why savers, investors and counterparty banks place their trust in the FDIC. It cannot go bust. The backstop is the reason the FDIC can do what it does.”

The question that comes to mind is that if the backstop of the US federal government relating to FDIC is implicit would not a similar situation suffice in a European context? It seems that that is what the outcome will be.

@ JG

On the subject of the most recent decision of the German constitutional court and the views of Paul Krugman, neither is likely to impact the course of events.


By way of unwelcome advise, just don’t go there, the position has always been clear – there is a value, call it franchise, brand, inertia or whatever, but that value is a small fraction of the funds/liabilities themselves.


Text from Blind Biddy in Kharkov:

‘I find it disturbing that a Taoiseach of an Irish Republic today co-signed an EU agreement with the leader of an unelected interim administration that contains six (6) ministers from Svoboda, an extreme far right fascist party that traces its motivation back to a Ukrainian WaffenSS group. Friends here in Kharkov, where history runs deep as they remember the twenty (20) million Russians who died in the battle against fascism in WWII, are much more disturbed, and frightened, at these developments.

What would my great-aunt Katharina, who led her tank battalion into Kharkov to signal the end of the Battle of Kursk, say? Got to go now – have a date with Paddy Zhukov, a direct descendant of the Marshall of the same name, and a lovely, lovely man. (rumours that his grandfather had an affair with Katharina are totally unfounded – she was loyal to her beloved Cossack to the very end’

p.s. I’m still totally bowled over ….. spinners, spin away!

Martin, apparently, is devastated, at being knocked about by the Orange men again.

I’m seeking solace in philosophy …

“Question: What’s the point of a university?

John Toland replies: “The university is the most fertile nursery of prejudices, whereof the greatest is, that we think there to learn every thing, when in reality we are taught nothing.”

http://www.irishtimes.com/culture/unthinkable-irish-radical-s-challenge-to-notion-of-god-still-relevant-1.1730827?page=2 nite

The DoF had hired Merrill Lynch a year after the CEO was fired for bringing the bank to the brink of ruin with $45bn of subprime CDOs and mortgage bonds in its balance sheet.

“A few things became clear,” Stan Neal told Fortune in 2010. “One is the complexity of it was far beyond what I would have imagined. Second, the number of people who actually understood the aggregated view of this – not just in terms of size and scale but the potential complications associated with it – were few and far between.”

Still, the bank had ‘experts’ in Dublin and London – who had never experienced a crisis before – the DoF also relied on experts in other big fee firms such as Arthur Cox and PwC.

What is striking about the report is the delusion among Irish stockbrokers with Goodbody having ‘Buy’ recommendations on AIB, BoI and IL&P shares.

It’s easy to be wise after the event but the international situation was rapidly deteriorating and within weeks, the Investment Property Databank (IPD) would show that UK commercial properties lost 26.4% of their value in 2008 – the most since its records began in 1987.

Five and a half years of growth had been lost in 18 months of successive falls, IPD said – but even by Feb 2009 PwC experts in Dublin were sanguine about Anglo Irish Bank’s potential losses.

The truth is that all of these folk were insiders and believers in fairytales are not easily convinced by contrary evidence until the disaster happens.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” Alan Greenspan told the House Committee on Oversight and Government Reform in Oct 2008.


The potential benefits of a single market in services are exaggerated.

It’s generally a game for big firms.

In recent times it was most evident in cross-border banking and as with the entry of Bank of Scotland to the Irish mortgage market in the late 1990s, there were competitive gains but there were negative impacts as well.

We are not likely to see a return to significant cross-border banking anytime soon.

At the top end of markets in accounting, auditing, consultancy, engineering etc international groups operate oligopolies where competition is seldom on price.

In individual countries, they can afford to attract the perceived best talent while they are the providers of choice to governments and public sector agencies – “No one ever got fired for buying IBM,” is an old joke.

As for digital services, US companies have made big gains by cutting their tax bills but multilingual Europe cannot replicate America’s big single market where the winners build up a huge number of users.

As for small and medium size firms, services are very different to manufacturing in respect of distribution to potential customers.

Local contacts and local reference business are key and where would the competitive productive advantage be, when it’s mainly a people business?

The European Commission says that around 1m SMEs annually face problems with cross-border debts and up to €600m a year in debt is written off because businesses find it too expensive or difficult to pursue lawsuits in other EU countries.

Returns are also a big problem for online retailers and the Economist has said:

“SCHREI vor Glück oder schick’s zurück!” went the slogan for Zalando, a big German online retailer: “Scream for joy or send it back!” But so many people took up the second half of the slogan that Zalando now uses just “Schrei vor Glück!” in its marketing.

This year the European Union has a law similar to Germany’s, obliging online firms to offer a no-questions return period of 14 days.

@ All



@ MH

The single market in services is broader and of more significance than you appear willing to accept. Bloggers can come to their own opinion by reading the Monti Report. What it illustrates is that launching into a single currency against the background of the failure of member countries to avail of the existing treaty provisions to deepen the single market risked being a hazardous leap in the dark; and so it has proved to be. The current Commission president has been incapable of either achieving recognition of its importance or doing anything to drive it forward. The moves that have taken place have been in response to the pressure of the events created by the euro crisis.


@ Brian Lucey

Pretty interesting efforts from your side!


Could you be more specific, where I should see “debt mutualization”, and the eeeeky e-word “euro-bond”?

Brian Woods Snr

I see the psycho problem a lot more within the Ukraine. Mickey Hickey put a description here.

On March 3rd, 2014 at 7:25 pm, I referred here to a commenter Cassandra on an FT link providing 2 interesting links, and since not everybody here might have an FT Abo:

The first is from a former US ambassador to Moscow during difficult times


which is from my perspective pretty realistic. The US also did not wait for a popular vote in Cuba, to say the nukes will not stay there; expanding NATO into Ukraine would cross red lines

And when I Iooked at the second


and saw the picture of Nuland with the Kiev folks, including this svoboda guy, I also thought, now here we have it. After the Spiegel International smear, I took a second look, and wondered what do they REALLY show, and what this picture really shows. Not a lot actually, if a politician visits a foreign parliament, all kinds of people make pictures with them, over which they have little control. That doesn’t mean that I am now pleading innocent for Nuland, but keep things in proper perspective.

Because researching the site turned up

“Is Global Research CA a reliable source of news – Democratic Underground”

Their reputation is apparently also a pretty mixed bag.

There is a long tradition in Germany, that certain folks on the hard left side, today this is more often Green party folks, try to demonize conservative politicians. I have here a “Das neue Schwarzbuch Franz Josef Strauß”, printed 1980. At that time I was a kid and gullible. When I look at it today, I see many of the same mechanism, guilty by association, endless “reporting “ of allegations nobody can check, and which only look like evidence, if you take a harder look.

And twisting words in order to paint people as anti-semitic is a well honed way of character assassination. Ernie Ball remembers me of that.


A few recent ’embers’ as the usual suspects circle the wagons:

Irish Nationwide ex-director ‘surprised’ at KPMG response
Terry Cooney writes to Oireachtas committee after liquidator’s reply to Pearse Doherty


@Prudent Hans

If you keep on digging that hole you might not be able to get out of it. Accept the reality that Svoboda, with its direct line to UkrainianWaffenSS, and 6 ministers in the proxy interim gov, has its German backers. Fact.

Course our Taoiseach recognized them as well by co-signing in Brussels – and he was about with the T-party in the US recently; course his party has a bit of ‘form’ in this area in the 1930s …. Good ol’ Blighty & Comrade Joe! (did I really say that? Yes I did.)


Spin away. Take advantage of my fragile condition. I’m still fairly bowled over by those Orange men … need a quiet walk in the garden …

Blind Biddy is out an about with Paddy Zhukov and is not to be disturbed over the weekend. The EU can rest easy …


The Monti report has some interesting proposals.

However, my point about small and medium size services firms stand.

A small manufacturer can begin exporting via distributors witout initially having any permanent staff located overseas.

@ David O’D
You may find it disturbing but the Taoiseach was in the US kissing ass on St Patricks day. After a few drinks he, no doubt, promised to join the good ould USA in a restart of the cold war. Irish foreign policy is stuck in the fifties, even worse it would not surprise me that if asked Kenny would join the coalition of the willing in NATO.
A country the size of Ireland should remain neutral and express sincere concern and hope that the warring parties settle their differences. Any tax break advantages we have are in the hands of lobbyists of US MNCs and Ireland’s influence on US tax law is zero. It is time the gombeen act was closed. On the other hand Russian money needs a new safe haven (risk spreading) to replace Cyprus and London. we should be manoeuvring ourselves into position to benefit from that. There was a St Patrick’s parade in Moscow his attendance there would have benefited Ireland.

It was not just Merrill Lynch.

Appendix D (Page 54 rotated) in the Merrill Lynch memo tells us what how the best paid brokers in the best paying banks in the world valued AIB/BOI/PTSB shares in early Nov 2008. This was two months post Lehmans and 5 weeks post the most calamitous financial decision ever made by an Irish government.

It would be a useful page to print off and keep, for the opportune moment, to remind the masters of the universe just how masterful they were at their trade.

Anglo Average Recommended Price: €3.27
AIB Average Recommended Price: €5.09
BOI Average Recommended Price: €3.01
ILP Average Recommended Price: €5.68



Changed the game – a little rugby on a cold,breezy, p1ssin rain Thomond Park bring one back to reality.

Raking over ‘old coals’, as in the above, clearly shows the System of Money & Power cooperating in the interests of the Systems of Money & Corporate Power: when it pinches, they screw The Lifeworld.

On the other topic of interest, ones hears simplistic talk of ‘landgrab’ …. yet as in the above, by far the largest ‘Landgrap’ in the Ukraine is miraculously taking place in the interests of the System of Money & Corporate Power; as in the above, there are zero qualms about screwing The Lifeworld.

Following is well worth reading:

Nuland’s Role

That puts Kramer and, by one degree of separation, Big Ag fixer Morgan Williams in the company of PNAC co-founder Robert Kagan who, as coincidence would have it, is married to Victoria “F*ck the EU” Nuland, the current Assistant Secretary of State for European and Eurasian Affairs.

Interestingly enough, Ms. Nuland spoke to the U.S.-Ukrainian Foundation last Dec. 13, extolling the virtues of the Euromaidan movement as the embodiment of “the principles and values that are the cornerstones for all free democracies.”

Nuland also told the group that the United States had invested more than $5 billion in support of Ukraine’s “European aspirations,” meaning pulling Ukraine away from Russia. She made her remarks on a dais featuring a backdrop emblazoned with a Chevron logo.

Also, her colleague and phone call buddy U.S. Ambassador to Ukraine Geoffrey Pyatt helped Chevron cook up their 50-year shale gas deal right in Russia’s kitchen.

Although Chevron sponsored that event, it is not listed as a supporter of the Foundation. But the Foundation does list the Coca-Cola Company, ExxonMobil and Raytheon as major sponsors. And, to close the circle of influence, the U.S.-Ukraine Business Council is also listed as a supporter

Read on:
http://consortiumnews.com/2014/03/16/corporate-interests-behind-ukraine-putsch/ [h/t nakedcapitalism.com]

@Mickey Hickey

Agree. European Foreign Policy isn’t that much behind Hibernia. Between themselves and the federation they allowed a. n. other corporate power to walk in and landgrab in the middle. That said, Catherine Ashton is doing the best that her restricted portfolio (to placace the egos of Merkel & Sarkozy) allows, yet manages to comfortably exceed it – pity she doesn’t have backers with the ‘mettle’ to provide her with the requisite power; and, for a change, place the interests of the The European Lifeworld first. Russia is also European.


Sector analysts have generally, out of necessity, gone native & would usually be split:

4 Buy
5 Hold
1 Sell

per 10, with appropriate price targets. You split out the house brokers anyway for obvious reasons.

A bright graduate trainee would sus’ this out within a couple of months. Many government officials and politicians haven’t done stockbroking 101 though.

@ D O.Donnell
US big Ag (Cargill, Monsanto et al) snap up Ukraine assets. It is almost as bad as what the English did in Munster at the point of a sword. I love that word putsch.


Speaking of ‘old coals’. Anyone know who this N Gregory Mankiw fellow is? Seems to be a chef (or perhaps a cook?). Has this recipe for a rather interesting Economic cassoulet – NYT [03-22-2014].


I’m not being specific wrt Anglo or any particular bank. The point is that if you, as a corporate or government client, seek advice about a company from a sector analyst or team you are dealing with people who generally have an affinity with the company and its management, plus they tend to like (in the most general sense) the sector.

It is difficult to be an effective forecaster of EPS etc if you have annoyed the company’s senior management or financial PR. Information and hints tend not to find their way to you.

If you come in cold as a client and look at price targets for a range of companies in that sector, particularly in what some are arguing could be a really big bear market for the sector, you won’t understand the pressures on analysts and c. fin biasing these against very low numbers.

@grumpy i was referring to JR’s page ref at back of ML link in which only one analyst had a ‘buy’ on Anglo two on AIB,the rest said it had a good personality including ML.
oh i think the Irish govt. knew exactly what they were doing,the above report was from the i banking not research side,they had zero or no cred left at that point.

back in the days off grubman/weil and blodget ML,they settled for 100mio this is before the irish govt retained them.

“Eliot Spitzer, New York’s Attorney General, uncovered a number of e-mails written by Merrill Lynch investment analysts describing as “junk,” “crap,” and “a disaster,” stock that they were publicly rating at “buy.” In his initial accusation (April 8, 2002), Spitzer argued that this biased investment advice was rooted in an undisclosed conflict of interest. The analysts had continued to give favorable coverage to Internet companies through 2000, even though their stocks had been in continual decline. The investment advice, Spitzer charged, was biased by the analyst’s desire to support Merrill Lynch’s investment banking interests.”


@BWSnr he writes most sunday’s in the NYT quite a well know chap over here,wrote a book or two and teaches a bit up the road in Boston,fond of the foodie references posed that question,is mickey d’s in the service business or manufacturing regarding big mac’s.Was a BFF of Bush but is held in high regard by all accounts.

@DOCM/francis this is a decent summary and while it would appear un-related,its not, Gross/Pimco’s recent letter advocating more risk somewhat reflect’s US investors view’s off the EU and the periphery.
He even uses a WB Yeats quote.

“Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;”


@ JG

The Voxeu item would be persuasive if the Basel capital requirements were adequate but even to an untutored person such as myself they clearly are not. Banks – especially German ones – are dangerously over-leveraged i.e. lending on the basis of borrowed money rather than own funds. The Pimco darts board may go some way towards mitigating the impact but not enough to obviate the need for the SRF to at least have a “line of credit”; but to what and to whom? This is the question to which Draghi appears to be awaiting an answer.

The situation is further complicated by the fact that the issue of how the money is to be provided and by whom is being decided in an inter-governmental conference (IGC) i.e. outside the formal institutional structure of the EU and where the real players do not have to put up with the nuisance of the European Parliament.

P.S. I believe the English technical term for the proposed hierarchy of bail-ins is a “cascade” (“cascada” in Spanish) rather than a “waterfall”. There must be a belief that the Anglo-Saxons do not have a word for it.

@DOCM oh it was OMT had no line credit,then Italian NPL’s now over leveraged german banks,always something out there.The great deleveraging continues and will.Its a good step in the right direction no its not perfect but what is.Does anyone truly believe 29 out off 30 US banks passed the stress tests?


Who In Ukraine Will Benefit From An IMF Bailout?

Posted on March 23, 2014 by Yves Smith
This is an important, nitty-gritty discussion of the grim prospects for Ukraine under the tender ministrations of the IMF from economists Jeffrey Sommers and Michael Hudson. Unlike many TV segments on social and economic issues, this one packs a lot of information into a short time frame. If you are time pressed, you can read the transcript [here]. A key section:

HUDSON: The objective of IMF loans is to deindustrialize the economy. It is to force the economy–meaning the government when you say the economy–the government has to pay the IMF loan by privatizing whatever remains in the public domain. The Westerners want to buy the Ukrainian farmland. They want to buy the public utilities. They want to buy the roads. They want to buy the ports. And all of this is going to be sold at a very low price to the Westerners, and the price that the Westerners pay will be turned over to the Ukrainian government, that then will turn it back to the Ukraine. So whatever the West gives Ukraine will immediately be taken back.

Be sure to listen to this illuminating case study of what an IMF bailout really means.



You will not believe it, you actually helped me find a spreadsheet error, looking up this Gross PTRAX, of which I hold a tiny bookkeeping position in my 401k. If he makes more of this noise I wil sell the last remaining tiny bits. They should fire the guy, tomorrow!

For me his concentric circles look a lot more like a dart board, or a target for larger arrows : – )

Equity and Real estate are > 80 % of total value, and not just some tiny fringe ring

The Allianz may run a good insurance business, but they really have a way to buy everytime the sh*t at the wrong time. It was the same just before 2000 with equity. Glad to have sold all of this.

I said it here before, this time the centre will hold.

It remembers me of last years Nockherberg, with a second coming of FJS (Franz Josef Strauß), the archont of Bavarian as a role, who suddenly realizes, from where he knows a certain politician: his photo is on the dart board of the local pub : – )

(https://www.youtube.com/watch?v=nXiyN9qnyyM from 50:30 on : – )

And the guy on market square today, who produced soap bubbles with about 5 feet diameter !

@DOCM/francis there has been plenty of chit chat about Gross and his management style shall we say!
Was looking for Krugerman’s review of the Piketty book,which is due any day now came across this he’s always worth reading.
francis has spiegel published a book in Germany with snowden on the NSA,NYT references a big story in Mondays print edition I think from either a book or a forthcoming one?

You may have to be a subscriber not sure,here it is

The Future of Europe: An Interview with George Soros
George Soros and Gregor Peter Schmitz APRIL 24, 2014 ISSUE

Parts of the following interview with George Soros by the Spiegel correspondent Gregor Peter Schmitz appear in their book, The Tragedy of the European Union: Disintegration or Revival?, just published by PublicAffairs.


Naaah, no subscription neccessary,

just fixing the sorts -> soros

seems to be a fat finger problem ….., LOL, just teasing : – )

Every time I read this Soros, I develop more sympathy for Putin, who threw this guy and his paid agents out of the country

The bavarian equivalent, Nockherberg 2014 https://www.youtube.com/watch?v=7C40fGWQQ5k from 19:00 on is the prime minister playing with a theatre requisite skulll, he got made from some unruly left journalist : – )

@ paulr

It is an open secret, that Germany has always at least one complete set of cash printed in reserve, at all times, and 2 more sets for smaller nations, in case of need. And I can not provide a link for that, ROFL.

Changing currency could be done over a long weekend, just Sat&Sun is a little too short.

I assume, that US and UK are similar.

If you need good cash printing, I can contact with wiki/Giesecke_%26_Devrient : – )

674 tons x 1336 USD / oz / 1.25 USD/EUR / 28 oz/g * 1e g /ton = 26 b Euro

ooops, about a factor of 5 missing, right, the total is 3395 tons

thats about the German CA surplus of 8 months.

I have no number for the investment positions of the 6200 German companies in Russia, but together with other EE countries, that could be similar sums


on Corporate Power – Other interests: Germany Inc. on Edge

[…] German companies are urging caution lest sanctions harm their business ties — and Europe’s shaky economic recovery.

The EU’s biggest economy has a lot riding on Russia. Volkswagen AG (VOW), Siemens AG (SIE), and HeidelbergCement AG are among the largest foreign investors there, the economic linchpin of a relationship nurtured by successive Berlin governments. Retailer Metro AG sells groceries to Russians, Adidas AG clothes the national soccer team, and Deutsche Lufthansa AG (LHA) flies to more Russian cities than any other western European carrier.



No newz from Blind Biddy & Paddy Zhukov!


‘Dear to Our Hearts’: The Crimean Crisis from the Kremlin’s Perspective

The EU and US have come down hard on Russia for its annexation of the Crimean Peninsula. But from the perspective of the Kremlin, it is the West that has painted Putin into a corner. And the Russian president will do what it takes to free himself.


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