Strategy for dealing with banks is working

Article in The Irish Times by Minister for Finance Michael Noonan is here.

It is being reported on elsewhere:

All of these seem an exaggeration of what was actually in the article and the use of single quotation marks by the Irish Independent suggests their headline is something Michael Noonan actually said. 

The piece from the Minister concludes:

I am confident that, over time, we will at a minimum fully recover the funds this Government invested in AIB, Bank of Ireland and Permanent TSB. If economic and trading conditions continue to improve over the next decade or so, the cash returned to the State combined with the value of any remaining shareholding may exceed the funds invested.

The confidence is about the recovery of the money put in by “this Government”.  That was the €19 billion put in after the 2011 PCAR exercise of which around €2.3 billion has been returned from the sale of Irish Life and the BOI contingent capital notes.  There is €17 billion to go.  The article does not say that all the money pumped into the remaining banks will be returned though is something that “may” happen. 

Part of this reported is likely the result of the byline used by The Irish Times which states that:

At the very least, the State should recover all of the money it has invested so far

It appears the sub-editor didn’t take in the actual text either. 

And, of course, there is no discussion in either the original piece or the reports of it that money received in the future after “the next decade” will have a different real value to the money used from 2009-2011 to recapitalise the banks, not to mention interest and opportunity costs. 

It is a positive that we are now considering some of the bank legacy issues as assets rather than liabilities. But the possibility of recouping money from selling stakes in the banks is not new and just as there was lots of exaggeration on the way down it now looks like we’ll get plenty of it on the way up. 

36 replies on “Strategy for dealing with banks is working”

Economics of the State as an Enterprise

Seamus writes,

. . . no discussion in either the original piece or the reports of it that money received in the future after “the next decade” will have a different real value to the money used from 2009-2011. . .

The best way that I have always conceptualized it, is as follows. The state needs, and furthermore deserves the modest surpluses of cashflow, that it generates for itself on rare occasion. But political representatives, tasked with a portfolio, that is financial related in Ireland, look at it from a business perspective. Our politicians imagine, that economics and cash flow management for a state, differs from that of an enterprise, such as a company. It does to a certain extent, in that a state, may be able to carry on its books, and support, a larger amount of debt (although, that has been constrained by EU regulation now).

The purpose of the modest surplus, that a state may be able to generate, is that it offers that state (like it would to any company), an opportunity to go and test out, de-bug and perfect certain programs or pilot projects, or even policies in the miniature state, . . . which it needs to conduct experimentation on, in a safe laboratory type of setting, . . in order that it can bring on-stream, such things in the future, that do present positive returns, and positive benefits, to its population.

The state, be it the state of Ireland, or anywhere, must engage in such R&D, and invest some of its cash flow, . . . as any other enterprise would, . . in order to discover, where its future direction lays.

What happens, when the Irish state, offers it’s modest surplus of cashflow to another private segment of the economy, or some other enterprise, . . . is that the Irish state, offers the benefits that such a modest surplus of cashflow, may have represented to the state, had it not had to hand it over to someone, or something else.

Sure, in the longer run, the Irish state, may discover, that its books will balance, and that the ‘net’ impact, of this temporary assistance that it meters out to ‘X’ or to ‘Y’, with all of the associated conditions that it will attach to such assistance, . . the net effect of all of this activity, that the Irish state will ‘loose’, no money in its balance sheet.

But to claim, that we should be happy, that the Irish state, will loose nothing in its LONG TERM balance sheet, . . . is really to ignore the fact, that it has worked extremely hard to generate that modest cash flow surplus to begin with, . . . which was intended to be put to good use, to improve and augment, the functioning of the enterprise that we refer to as ‘the Irish state’, . . that this modest surplus of cash flow in the medium to short term, has in fact, been GIFTED to some other industry, some other enterprise, and the benefit of the same, had been granted to some other stakeholder, . . other than the one, ‘the state’, who had won it fairly and squarely, to begin with.

The ‘state’ as it were does not loose out, but in reality, it does loose out, and loose out big time. We have had to delay the implementation and trial of, . . . who knows how many pilot programs, who knows how many trial runs, or test implementations, . . . from which, the entity known as the Irish state, may have discovered, . . . who knows, how many break throughs, in terms of better administration, better policy or new opportunity identification.

We’ve lost all of that, in Ireland, while someone else, has been allowed to borrow the modest surplus cash flow, that the Irish state had intended to be, for its benefit. And we are very generous, here in Ireland, and particularly it appears, where our politicians are concerned, in giving away the modest cash flow surpluses, that we do generate occasionally, at great sacrifice and labour.

We give it away to some other party, on a regular basis.

This is the great ‘spin’, if one likes, that the current administration, is so actively engaged in (and also, that of the last administration, and even the one before that).

I will ask one question to all.

Supposing that, the CEO of a major multi-national had been asked to gift over it’s modest cashflow surpluses, that it had ear-marked, for certain important (even crucial), research and development ? ? ? In the case of the multi-national organisation, . . how would that particular CEO try to explain that to shareholders? How would that particular CEO, attempt to describe it, in a newspaper column ? BOH.

Can anyone point me to a short summary of the costs of the bailout/guarantee/NAMA and what has been recovered so far by way of repayments and by way of fees paid by the banks for the guarantee?

Correction:. . . tasked with a portfolio, that is financial related in Ireland, DON’T look at it from a business perspective.

To the degree that the surviving banks are being fattened through diminished competition and the indulgence of expanding margins at the expense of depositors and (non-tracker) borrowers, the selling price will capitalise an unlegislated indirect tax on bank customers. Some of this bank-fattening is happening throughout the Eurozone via ECB-financed zero-risk carry trades but in Ireland it is clear that margins for (performing) retail customers have widened. Much of the proceeds of the indirect tax on customers leaks to private shareholders in BofI.

There is a kind of commitment problem for would-be buyers. As with privatised regulated monopolies in the utility sectors, governments can be less kind when they become ex-shareholders.

Put things another way

With the EU imposed regulation on amount that ‘a state’ may borrow, being more strict, that it was in the past, . . . many states, such as that of the Irish state, . . . will have to exercise more caution in terms of the generosity, that they so willingly seem to offer to other enterprises, . . . in terms of gifting, the benefit of their modest cashflow surpluses, to those other enterprises.

This is the main effect, to my mind, of the new EU regulation on levels of state borrowing, . . . that many states, in the past, who passed around the benefits of their cashflow, . . . will have less opportunity to do so.

The trouble here in Ireland, is just as the Irish State, had been so generous in gifting to another enterprise, the mother and father of all benefits, of short to medium term, cashflow health, . . . the imposition of the restraint on its own borrowing amount, fell on top of it at the exact same time, . . . and the Irish state, found itself in a gigantic squeeze. BOH.

@ colm McCarthy

An interesting angle which shows that this economics stuff has more mirrors than theoretical physics!

I think the test should be to consider the counterfactual. In other words, if the State had let the pillar banks go would the ensuing environment be one in which customers would enjoy more competitive retail banking than they currently do? Hard to see it. By this test the taxpayer is not only getting her money back but is enjoying reasonably priced retail banking compared to plausible alternative scenarios.


I can only recommend regular reference to SC’s blog.

The following entry provides a succinct point of reference as to how matters looked in April 2013 and how they look now.

In sum, nothing to write home about in terms of improvement but much better than what the worst case scenario suggested.

It is all in the presentation, as he points out e.g. a reference I saw just now in another contribution to NAMA “making a profit”. Some profit! However, as the average punter cannot identify from whose pocket the enormous losses are being made up, it is possible to get away with a general flight from reality; except in relation to the level of debt repayments.

Hopes that the further concessions that Greece may get will lead to a general absolution from debt are likely to be misplaced.

pro bono! qui bono?

The Blind Biddy Intelligence Unit would sort out AIB’s capital structure for a fiver!

No evidence of senior hurlin hardball … anywhere in this jaded admin.

6 yrs on from lunacy decision and not a “cent” chopped from the odious bail-in of the Irish Citizenry …

Also in the Indo article:

“And there was no mention of the Government getting money back through EU investment funds – that kind of retrospective bank debt deal was widely flagged in the past.”

That would presumably be “widely flagged” in the sense that publications such as the Indo widely waffled on about a particularly Irish and rather strained interpretation of the wording of an EU statement which was instantly “narrowly flagged” by several on this blog as vague and very non-committal hand waving about something that was not realistic in an EU perspective.

Reality got a bit Endatangled with something else at the time.

Re: Translation from Department Speak

Minister Noonan wrote,

The success in restructuring the banking system is recognised by investors and rating agencies, and the banks are no longer viewed as a risk to the financial stability of the State.

It’s important to translate this language, into what one Irish financier once termed, the simple speak.

The reason, that ‘the state’ had been so ebulliently confident in the first place, in metering out the benefit of its modest cash flow surplus, for the benefit of a different enterprise than itself, . . was the fact, that it (or some set of administrative individuals/advisers within it), had made some calculation, . . . that they would be able to back fill a shortfall of it’s own real cash flow, with the Irish state’s access to medium term borrowing.

Is the purpose, and real mission of a ‘state’, to do this, and to the extent that we seem to do it, in Ireland?

The risk, primarily, which the minister for finance Noonan, is referring to in his column, is that such gifting of the ‘states’s’ real cash flow surplus, to some other enterprise, is a mis-calculation by the Irish state (when the creditors to the Irish state refused to lend any longer).

Creditors, at the moment, are willing to lend to the Irish state, for a zero per cent interest rate, in the medium term, as I understand it, . . . as journalist Brendan Keenan explained in a recent column in the Irish Independent newspaper, . . . creditors, view the Irish state as debtor, as a safe place to ‘store’ cash, that has no other pressing function, or purpose.

What the Irish state, has done is convert that ‘cash’ (without a mission), and which needs a safe place to go, . . . into a synthetically engineered, simulated ‘cash flow’, that the Irish can just about get away calling it’s own (while at the same time, trying hard to conceal their smirk expression, and near-bravado).

I am not sure, for how long, here in Ireland, this is feasible to do. I’m not convinced that this particular doctrine, will stand indefinitely, . . . and the benefit to the ‘Irish state’ of retaining it’s own real cash flow, I think, would be to explore and investigate alternative new doctrines (which is all the more pressing, given the EU regulation on maximum state borrowings).

The situation of having to rely on generous borrowing terms, to the Irish state, as a debtor, is made acute, . . . by the Irish state’s willingness, it seems to me . . . to gift it’s own non-simulated, real, generated cash flow, . . to whomever, . . . and so that the Irish state as an enterprise is continually, trying to manufacture the synthetic cash flow, out of ‘cash’, which is simply lying around, on an open market.

There is an un-healthiness about it, a disregard for basics fundamentals of cash flow management, or I dare say, even an arrogance, which revolves mainly around synthetic financial engineering practice, and around sensible behavior.

That’s my honest assessment, for what it’s worth.

Looking at some major corporations, around the world now, and how they operate on very low levels of debt, . . . their cash flow, tends to be of the real type, and less of being the nifty (barely hide the crafty smiles), synthetically engineered one. BOH.

If they sprinkle lourdes holy water they might get money out of anglo as well !
I don’t know why baldy made such an audacious claim. Better to low ball the target and then show off when they come in with a much better result. But the way things are going in the US and UK I wonder how realistic a return to growth and normality looks.. there is no sov capacity for another round of banking fu@# ups.

Two links on the Greek connection that will be of general interest.

The problem, of course, is that, like the weather, Ireland’s historical experience bears no relationship whatsoever to that of Greece. Any argument based on it borders on the plain silly.


‘,,, plain silly’! ‘… no relationship whatsoever …! Very bold statement. Silly! This guy Stiglitz does not appear to agree with you. Shocker. Shur what would he know? Just another Citizen Joe Serf I spose …

‘The issue is not Greece. It is Europe. If Europe does not change its ways – if it does not reform the eurozone and repeal austerity – a popular backlash will become inevitable. Greece may stay the course this time. But this economic madness cannot continue forever. Democracy will not permit it. But how much more pain will Europe have to endure before reason is restored?’–stiglitz-2015-01

Anglo money is gone to heaven. The best we can negotiate is keeping the pro note in the CB for ever in a QE world. The structure is a work of genius and should be replicated with the trackers.

As regards MIn Noonan’s forecasting ability. He was widely derided on here fore for his rocket comments. He has been proved more right than wrong on that. That is is stark contrast to the doomers on here who have been more wrong that right to the point that they are starting to look like “truthers” or “birthers”.

There is so much partisan waffle being flung about that it is quite difficult to get a meaningful understanding of what has happened to our economies and what policy solutions (they are all awful) could be enacted.

You need to go back to the underpinning concepts, especially the one about an Efficient Market and how it should operate. This totally daft concept (the product of the best-and-brightest minds; so what does that tell you?) was prompted and accepted as if it were the economic Holy Grail. Its supporters even created wonderful mathematical models of it. So, since the theory is rubbish, so also are those models. But Stiglitz* seems to be holding the opinion that the models may be kosher:-

“… at best, the gap between where the economy (the US) would have been and where it is today is not widening.” – his first para.

Gap? What gap? – where the US economy WOULD have been and WHERE it is. The terms ‘would’ and ‘where’ imply what?: that a reliable quantitative estimate can be made of what is known as ‘economic potential’. That some key economic metric are measurable? That’s some mighty wild assertion.

Abstracting back some more. What is the accepted economic paradigm that underlies all this theory: its Permagrowth. The endless, steady advance of population; of food production; of consumption of finite resources and of the annual percentage increment it the availability of arable land. So how come we hear so little about this paradigm which according to immutable physical laws and the rules of exponential functions, is just impossible – in the long term? We have been relying on this economic paradigm for approximately 300 years – and its not looking so bonny at this time. Its inherent contradictions are showing through its decaying fabric.

Effectively, the US (using its massive productive capacity) exported part of its standard of living to Europe: keeping the remainder for itself. This process started to decline after 1973. The US started into a long-term economic decline. The other world economies had to look to themselves. This might explain some of the apparently inexplicable reasons for the introduction of the Euro. Maybe. Anyhow, after 1985 or so, China and India got into the standard of living export act: springtime for them, winter for us. Its called Austerity. But its not. Its the end of the beginning of our long-term economic declines.

To paraphrase Stiglitz. “Its not Greece, its not Europe, its not the US or China or etc., etc. Its simply our decrepit, atherosclerotic economic paradigm.” Applying QE stents will simply provide short-term clinical relief. QEs won’t remove the structural obstructions. Quardruple by-pass surgery (debt Jubilees) should prove more effective – but only in the medium-term. Hobson’s choice.

* To be equally unfair: Stiglitz is just one member of a dazzling chorus line.

Remember that the captalization of the banks and the recovery of money for the taxpayer is also being helped by keeping supply short, prices high, firming up the value of the loans on the banks’ books, and essentially transferring the costs onto the next generation in terms of high prices.

The problem for potential buyers of the banks will be the opposite of the one complained about by Bert Bruggink in 2009. Instead of complaining that the Irish banks will be subsidised and privileged by special govt protection, after they’re sold that protection might be withdrawn. And the value of the banks might be significantly less than their protected profits might indicate.

Re: Coup d’Etat of Irish State

@ All,

You see, what I think actually happened, in Ireland, at around 2008, 2009, or leading up to that point, was a minor coup d’etat’ of sorts, within the mechanism, or enterprise that we refer to as the Irish state.

Why do I come to this assertion?

Basically, because if one has lived in Ireland for the last few years, one have had to struggle, very hard to distinguish between how one would define what is known as an asset management corporation, and what we refer to as ‘the state’.

On the face of it, these two entities are characterized, by their having different kinds of mission statements. But given so much of the language, which has emanated from inside the bowels of that mechanism that we refer to as the Irish state (which of course, we are only receiving in second hand, via the language that is contained in legislation, or in sound bytes from our elected branch of the personnel, that staffs the state enterprise), . . . one would be forgiven, for thinking, that some significant portion, of the personnel who are tasked with operation of the state mechanism, . . . have gained an addiction to playing property mogul, and/or to also playing banker.

And in summation, what we witness in Ireland, for the last five years as being a very significant focus of attention, by the Irish state, are matters, which are very like those that would occupy the attention span, and creativity of those who might work for an asset management corporation.

The asset management function, can be incorporated into the mission, of what is referred to as a state. Indeed, a social policy function, may even be incorporated into the mission of what is referred to as an asset management corporation. But it is the proportion of this bias, and the relative primacy of either function, that tends to help us to distinguish (in normal circumstances), that entity which is known as ‘the state’, and that which is known as the asset management corporation.

In Ireland, this distinction has become so blurred as to become almost meaningless.

This is why I wanted to introduce the analogy of the modern day, enterprise, the corporation that produces goods or services, and innovates in how it delivers goods or services, to understand, how in early 2015, the Irish state as an enterprise might, or might not stack up, on that scale.

What we see in the modern day enterprise, the large global corporation often, is an ability to innovate a lot on the dimension of taxation and taxation exposure. In other words, this modern corporation is able to exercise a high level of innovation, in matters that are financial.

However, what we also witness in the modern enterprise, or corporation, is that they often will be less innovative when it comes to cash flow management. Why is that the case? Why would the modern enterprise, that delivers goods and services, in a competitive market become very innovative in one dimension of financial management, whilst being conservative in another?

I think, that the answer lies, in asking a question, . . . of what does a stable, real and un-contrived cash flow purchase for the modern enterprise?

And I think the one answer to that (bearing in mind, that we live in a universe now, that is highly technological and where innovation is important), . . . is discretion.

What the Irish State lost, to an overwhelming degree, when it made this transition, that it made, away from its original mission statement of operating as a state, and became more like an asset management corporation, . . is the Irish State, began to rely more on synthetically engineered, cash flow hole back-filling techniques, . . . and it lost the powers of discretionary spending power, that are critical to the practice of social engineering, and social policy innovation, . . . which ought to be the overwhelming mission of ‘the state’, . . and which only comes, when the enterprise, known as ‘the state’ (or any other modern company), has managed to glean for itself, a modest, BUT REAL, non-synthetically engineered, . . cash flow surplus.

This is why I think, unless I am proven incorrect about this, . . . that modern day innovative producers of goods in services, in modern day competitive, open markets, . . . exercise such sophisticated levels of financial management, in terms of their taxation strategies, whilst keeping it more straightforward and less convoluted on their cash flow management, side.

In regards, to the Irish State, we can almost definitely conclude now, that it has become overly convoluted, and synthetic to a high degree, now, on its cash flow management, side, in order so that some group of chiefs, within the mechanism of the Irish State, can continue to indulge in their fantasies of their being asset management corporation executives, rather not employees of something different, which is known as the state (which in this case, happens to be the Irish one). BOH.

Sorry Tull

That was a joke. As is getting E29bn back.
If deflation is the future (and the gold price indicates it may be) the banks won’t be worth much even with a Baldy stamp of approval.

@ Tull

Re doomsayers

1. UK inflation is down to 0.5%

2. Last year in the US the volume of money used in share buybacks was 5.5 times that invested in business. That is taking the p***.

3. Brent is now down to a 6 year low

4. FT editorial from November said
“QE was a response to a time of recession, financial distress and the threat of deflation.”

Maybe it just delayed it


“The US Federal Reserve risks making the same mistake as Japan in the 1990s by letting inflation run below target, warned the president of the Minneapolis Fed as he explained his dissent at this week’s meeting.With inflation running below the 2 per cent target for a couple of years, Narayana Kocherlakota told the Financial Times it is essential to take “ongoing action” to maintain the credibility of the Fed’s inflation goal.”

I don’t think we can say we are out of the woods yet.

Re: Exceptional Times in Ireland 2008-16

One slight clarification, if I may impose this upon readers.

Why is there something called, an asset management corporation, at all?

I think, the the reason why things called asset management corporations, exist, is so that we can create a type of enterprise, that doesn’t have to worry so much about shorter term cash flow management, in order to achieve it’s primary mission.

Then, you can also ask a similar question.

Why does something, that we refer to as a state, exist, at all?

I would argue humbly, that fulfilling the true purpose of something referred to as the state, in almost any incarnation, cannot involve too far a departure away from the practice of good (shorter term), cash flow management techniques, . . . and by that I mean, non-convoluted ones, . . in preference, to the practice that the asset management corporation, is free to engage in, which is almost to ignore the aspect of shorter term, cash flow health and well being.

Accepting the fact, needless to say, that the entity known as the Irish State, found itself in a unique situation in 2008/09/10/11, . . . one would have to compare it to situations, such as the one that Great Britain found itself in, in 1939 for example.

British public were prepared, to forego to the war time, necessities and exceptions that it needed to make at that time, for the sake of defending themselves against an enemy that was at the gates.

But historians, may also remind us today, that immediately following the resolution, of that six year conflict that had began in 1939, that the British public just wanted on thing – they wanted their country back.

Without that end result, in sight, much of what had had to be endured for that six years of war, would have been for nothing. And one wonders, given the particular, language, that administrators of the Irish State in 2015, choose to adopt, . . one does wonder indeed, I fear, if a faith similar to that of great Winston himself, awaits this present regime?

I would encourage, some future historian or economist maybe, to put a claim on the title above, as something that might look good on the cover of a hard back. BOH.


Michael Taft on how the serfs are ‘making ends meet’ in the Hibernian ‘woods’

‘The EU asks such a question in the annual Survey of Income Living Conditions. They break it down by degrees:
•Households making ends meet with great difficulty
•Households making ends meet with difficulty
•Households making ends meet with some difficulty

This is the result: [graphic]

… Ireland is well above the EU average and far above our peer group – other small open economies. More than one in six are having great difficulties, another one in six having difficulty while more than one-in-three are having some difficulty. When we add all these difficult household experiences up we find: [graphic]

I think it a bit taft to try and interpret surveys asking “how difficult is it to make ends meet?”.

The answer would be a function not only of income but of consumption expectations. Ireland’s consumption expectations have been built on the craziest “living beyond our means” boom. I’m surprised we don’t top the charts on this. For example, I would say a former developer reduced to working for NAMA for 100K would say he has enormous difficulties making ends meet.

Similarly I am sure there are lots of people on more humble middle incomes struggling to keep the second car and all those sports channels.

I note from the above link that Michael Taft has adopted the slogan “Victory to Syriza”. That’s funny coz I think I am what MT refers to as a neo and I too have adopted that slogan!

The difference is that MT thinks this would be the path to ECB forgiveness of 50% of our national debt. I see it as the time when the EZ finally loses patience with Greece. The resultant calamity for the Greek people should be a timely wake up call for the Irish electorate.

@The Second

As an experienced former senior professional in the Irish Financial System, your comments are noted.

You might provide an ‘insider account’ [of which we have far too few] of how the said System ran riot … and wrecked the place.


Colette Browne in fine form on this topic:

‘When Taoiseach Enda Kenny, in 2012, claimed that, “the agreement that we have now brought about here allows the European Stability Mechanism (ESM) to be used directly in capitalising banks”, he was right.

The ESM will be used to recapitalise banks – just not any Irish banks. It will instead be used if there is any future banking collapse, with the idiot Irish paying into the fund as well as paying the full cost of bailing out the entire Irish banking sector.

Cognisant that recapitalisation is now dead in the water, the Government is now focused on Plan B, selling its shares in the banks on the market, and is desperately pretending that this was its plan all along.

To that end, Goldman Sachs – memorably described by ‘Rolling Stone’ magazine as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” – has been appointed to advise the Government, for free, on a potential sale of AIB to try to recoup the €20.8bn of State aid that saved it from extinction.

@ David

Ahhh! So you ARE upset that things is looking up!

If you are going to play the man and not the ball make sure you pick the right man. I am NOT an insider to the financial crisis.

The government deserve a severe slating for at best seriously misrepresenting the possibility of a retro recap from the ESM. Anything I ever read from that source made it quite clear that retro recaps would not be available for insolvent banks like Anglo. The possibilities were clearly limited to viable banks.

It is clear that, with the remarkable comeback of the Irish economy (refer JtO for details) it is now thought that more might be obtained from the market for a viable bank than from a retro recap.

@The Second

I play the man with the ball; and I’m on the ball with your good actuarial self.

I remain upset, not with any upturn, but with the odious lumping of odious fin. sys. debt on the Irish Citizenry and the dire consequences of same for the humble serfs.

“It is clear that, with the remarkable comeback of the Irish economy …”

I believe some caution is in order here. “Dead-cat bounces”, and all that.

It’ll be a ‘comeback’ when the construction sector comes back – but to what level? 2007? That would be stretching it somewhat. Would 2004 suffice? But that would be a regression?

Retail is also looking somewhat dodgy. Its reportedly down as a proportion of aggregate economic activity. And the additional charges and levies on incomes will provide a comeback in consumer spending? Unlikely. Watch out for the ‘savings’ rates. If these climb, its bye-bye comback.

Numbers of homes for sale are at historic lows; so are new mortgage approvals (ex, the refis). Lets see what the spring selling season brings up. If prices hold up, and mortgages are difficult to obtain. Then what?

It will be a comeback if the majority of resurrected employments have wages and salaries which are above the 2009 medians. Think this is possible? I think not.

Funny thing. In the sort of uncertain economic situation we are in you can experience brief bursts of consumer spending for all sorts of strange reasons.

Lots of ifs there. But then if you insist on exporting your productive investment to Asia and importing their standards of living – what would you expect? A simultaneous increase in both? Apparently.

Here’s one for Tull on the UK economic miracle

“Philip Rush of Nomura says part of the reason for the (productivity) forecasting failure (of the Bank of England) reflects insufficiently taking into account severe problems in three high-pay, high-productivity sectors: oil extraction, banking and finance and utilities. “The sectors that are growing in the UK are not the high- productivity ones, so jobs intensity is inherently higher than it was before.””

That was middle of last year before the a#se fell out of the oil price . The productivity graph with the article is fairly damning.

And now

Osborne missed his deficit target due to wage deflation linked to productivity stagnation. It looks very like the UK rebound is a property bubble.

@ David

I agree that the Irish “serfs” are being asked to pay.

But not the Irish people.

Germans, let’s use them as a generic sampler, gained nothing. They got their money back.

So where is the €bn35 that the taxpayer poured into Anglo? They are with Irish citizens. Those lucky folk, farmers et al, who made obscene profits from sales to Anglo fuelled and Irish regulator sanctioned debt.

A true leftie should be looking to recoup these totally unjustified windfalls from their recipients – retrospective tax if need be, not seeking to get an amnesty from foreigners for our ineptitude.

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