Author: Karl Whelan

O’Toole on Lenihan on Economists and the Media

I had decided last weekend to ignore Brian Lenihan’s comments about Irish economists being a cosy cartel unwilling to debate each other. We’d been here before: Recall Lenihan’s “national mediocrity” moment in which he implied that pro-NAMA academic economists were too scared of people like me come out and admit their views in public. And frankly, I’m more inclined to believe the Minister is engaged in PR spin with this kind of thing rather than expressing his true opinion.

However, I must point towards Fintan O’Toole’s discussion of Lenihan’s speech because whatever about being accused of being part of our national mediocrity or being part of a cosy cartel aimed at suppressing debate, I do feel compelled to clarify that I do not work for Trinity College Dublin but for Ireland’s leading Economics department, the UCD School of Economics. 😉

Trading and Investing in a Smart Economy

The government’s latest strategy document is Trading and Investing in a Smart Economy. Apparently, the strategy is going to create 150,000 jobs directly and a similar number indirectly. Sounds good, though how exactly it’s going to achieve that was a bit unclear to me. Admittedly, my persual of the document was a bit brief as I’m suffering from glossy strategy brochure burnout.

Do Academics Only Work 15 Hours a Week?

This is a touch on the navel-gazing side but, at the same time, since everyone seems to agree that having high-quality universities is an important element in future economic growth, it seems worthwhile explaining how academics actually work.

Continue reading “Do Academics Only Work 15 Hours a Week?”

QNA Release for 2010:Q2

The quarterly national accounts for 2010:Q2 have been released. They show seasonally adjusted GDP declining 1.2% quarter over quarter and seasonally adjusted GNP down 0.3%.  Year over year, real GDP is down 1.8 percent and GNP is down 4.1 percent. Nominal GDP is down 3.6 percent year over year while nominal GNP is down 6.2 percent over the same period.

There were also revisions to the first quarter figures. Seasonally adjusted quarter on quarter growth in GDP was revised down from 2.7 percent to 2.2 percent, while the decline in GNP was revised from 0.5 percent to 1.2 percent.

Anglo Subdebt, Again

It is now pretty clear that the government and Anglo management are shaping up to do a buyback deal on Anglo’s outstanding €2.5 billion in subordinated debt after the original CIFS guarantee expires at the end of the month.

Here’s my question. Given that

(a) The terms of these securities allow for the possibility of them not being paid back if the bank is insolvent (this is why banks get to count these securities as part of their regulatory capital).

(b) None of this debt matures until 2014 at the earliest (see page 56 of Anglo’s interim report).

(c) These bonds will no longer be covered by a state guarantee.

why would we do this? Why not let the bonds sit as an obligation of the Asset Recovery Bank, let it go about its business of recovering value from assets, and then let the next government make a decision in 2014 as to whether we want to put in taxpayer funds to pay off these bonds?

Those of you who want to comment that you think a bond buyback is a good idea might help clarify things a bit by explaining what type of deal you would offer (i.e. how much of our money you’d give the hedge funds and other distressed debt outfits that now own these bonds.)