Bad Bank Bad Economy 11

March 23, 2015

Fresh from his return from the USA from which he failed to obtain any substantive deal to benefit  difficulties faced by the illegal Irish in the US, Kenny has taken the floor to stamp down on outspoken views of Greek agitators. He is hoping to secure a better deal for Greece.

Not as far as anyone can tell!

Instead of lending support to those working to secure debt write-down, he has taken on the role of the outspoken far right in Germany and in  EU. Embarrassed by personal failures to secure debt write-down he claimed was on the cards following June 2012 EU summit, he has taken to the role of court jester in terms of valedictory remarks re Irish bailout rather than Irish sell-out.

How else can you explain antics to denigrate  efforts of Greece whose success would help Ireland to vindicate promises of 2012.

Such paradoxes extend further and apply to our economy.

The term ‘Fragile Recovery’ has become a euphemism to claim the economy is not brain-dead and on life support! Lets look at some more of its paradoxes.

Though 80,000 emigrated last year, 30000 jobs allegedly were created.

Unfortunately lies, damn lies and statistics do not break employment statistics down on a job by job basis.

How many of those jobs were vacated by those who’ve had enough of austerity? Most jobs by far created in the Dublin area were ominously in the financial sector. Few jobs created outside Dublin.

A mini property boom in Dublin has generated some jobs alongside jobs in the tourism sector noted for zero contract and low paid if not seasonal work. How many so-called  ‘new jobs’ were vacated jobs left behind because of a rising brain drain luring Irish professionals to better paid and better prospects abroad.

Emigration is a boon to the authorities reducing the cost of welfare services. It has become an invisible contributor to the stabilisation of deficit spending by this government. No doubt it plays its part in claims we are growing at a rate of 4% such is its paradox.

Another such paradox or contradiction behind the claims of our fragile recovery is  return of a mini property boom in Dublin. bad-bank-structures catch-22 of claims the economy is returning and the paradoxical fact of property shortages leading to a boom in prices.

Let’s examine the paradox?

Sun Independent, 15 March, p12, Alison Bray: “There are other complex reasons for the plethora of derelict sites in the capital. Some are the subject of disputes over ownership, others have been put into receivership or liquidation or are under the control of the State’s ‘bad bank’, Nama.

You thought the bad bank Anglo had gone away? No, its detritus is hidden away in NAMA far from where the eye can see; but its ill effects are everywhere. Whereas Anglo fed the boom, NAMA is using its control vice mechanics to generate property shortages in Ireland.

This ensures ‘pillar banks’ banks feed upon large loans to fund exorbitant property prices; it allows redundant banks to claim and act on higher than normal asset prices. It even encourages banks to proceed with evictions to oust the 30000 whose mortgages are in deep arrears.

Banks hope to seize these properties and sell them on the NAMA controlled property market. By inducing a housing shortage in refusing to fund Irish property developers who are ready to begin construction as previously reported in this blog and elsewhere, NAMA is only interested in attracting vulture funds it solicits by creating the conditions for a high rental return for these funds.

Activities of NAMA shrouded in secrecy under FOI and by other means, should be investigated and exposed. Young people are being fleeced in post recessionary Ireland with a controlled fraud of high rental returns. Many will never afford entry into property ownership.

Here is a list of Nama properties available for sale on a county by county basis

“NAMA is obviously obliged to obtain the highest price possible for the properties it controls and may sell properties by public auction, public tender, private treaty or whatever the normal market practice is for the particular type of property they are selling.

To sum up, if a sales agent has not been appointed (and therefore not yet listed by NAMA), you should deal with the receiver (by email) and they will pass on your contact details to the sales agent. If a sales agent has been appointed, you can deal directly with them.”

Evidence that Nama is tampering with the market using its position to control residential property pricing is worth investigating but hampering such an investigation is the fact Nama is enveloped and cocooned in secrecy laws that would rival those of the CIA or KGB.

This is not new controversy, see

“On the 27th January last Fianna Fail Senator Mark Daly made a series of very serious allegations on Today with Pat Kenny against the National Assets Management Agency (NAMA).

The allegations are as follows:

That NAMA is breaking the law by failing to hold public auctions or competitive tendering for the sale of public assets within its remit.

That NAMA is allowing some properties to be sold back for virtually nothing to the original owners.

That NAMA is facilitating a scam of monumental proportions whereby friends of the original borrowers are putting in false bids for assets thus preventing Irish taxpayers from obtaining the maximum value from the assets.

That the scam is happening wholesale and without any transparency whatsoever.

That the scam, although widely known about within official circles, is being ignored by the authorities.

That within the next six months the best properties will be cherry picked by the ‘scavengers and vultures’ resulting in a very serious loss for Irish taxpayers.”

Lets look at NAMA. Is it the invisible hand of a false recovery for the Irish economy.

A post recession Irish economy should be spending on construction 12% of GDP, it is currently spending only 6%. Why is this incredible fact true?  Check out reasons above and feel free to comment below.

 Irish Water

Congratulations to the tens of thousands who marched last Saturday to protest against Irish Water missing the Scotland/Irish rugby match and making personal sacrifices to turn up.

They are not convinced by the paradoxical and ludicrous arguments of Minister Alan Kelly in favour of Irish Water and they are determined to rout FG/LB next election. Kelly makes the ludicrous argument of huge infrastructural development projects eg Shannon/Dublin scheme that Irish Water is required to invest in short to medium term.

According to Kelly only Irish Water can make such investments on behalf of the Irish people. Naturally the paper boys with armies of investment consultants and access to international vulture funds lie in wait to provide these lending services.

Marchers against Irish Water including those against Irish Water who’ve been bullied into signing up including the old and the infirm, are not willing to suspend their disbelief at the notion that the repayment of capital investment to pay for the super quango and any further investment, will arrive through increased charges in the future.

Marchers argue that such investment should come out of general taxation.

If Kelly was not such a mindless puppet of the troika or financial overloads who’ve fed him useless advice, he would get off his butt and head to Mario Draghi and the troika to demand a write-down of Ireland’s annual €8bn repayment to its bondholders to pay for the infrastructure of Irish Water. Why not argue for a European grant for a Hoover Dam project for Ireland to help get its economy moving?

Kelly knows about grants. This morning he announced a €250ml (I kid you not hospital trolley watchers) Rural Development programme. He wants the deserted villages to be a key part of the renewal programme. Grants to the rural community come in all shapes and guises. A recent radio programme on rural matters heard one contributor ask that a grant aid be provided to create a shared group of workers for farmers to utilise with training provided.

City dwellers instead get grants taken away through austerity for every disabled group and grants for groups helping to fight drug addiction are starved of funding. There is a rural/city divide. Yet grants for the capitalisation from Europe of Irish Water in spite of the outflow of €8bn a year to bondholders, are off the table for Kelly and Kenny. Another paradox.

Do not suspend your disbelief!

To break the link between the financial services people, the banks and politicians. In particular, the break the power of BAD bank NAMA to control and further ruin this economy,we need to build some good Chinese walls.

First up should be a law that prevents politicians taking up a post with a bank within 5 years of leaving office.

Before that we need to scrutinise the activities of NAMA.

Meanwhile its just been revealed that the amount of building land available for construction in Dublin has been vastly overstated. Perhaps ‘Fragile Recovery’ should be replaced with the term, ‘Controlled Scam’.


till again

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You think banks tampered with asset prices in Ireland’s property bubble economy that became a dead a dead cat of financial meltdown?

The whole nefarious edifice of 100% mortgages, subprime lending, madcap lending led by the banks, responsibility?

Professor Honahan last week appeared again before the Banking Inquiry. Increasingly looking like Mr Byrnes of the Simpsons he sought to disingenuously disengage from any responsibility in the whole debacle.

At the outset Honahan refers to a letter he wishes to point out would have led to alternative course of action the government might have taken in September 2008. He points out he himself had no involvement in the guarantee decisions, his views are based on the May 2010 report he prepared on his review of financial stability leading into the meltdown.

Honahan criticises the guaranteeing of subordinated debt, draws attention to how the government neutralised its capacity to deal with the subsequent meltdown by being unable to close bad banks because guaranteed loans could not be repaid. He criticises the failure to consult as making it difficult for the government to ask for burden sharing.

But we need him to explore and explain the role of the ECB and the Irish Central Bank in the debacle. Show us documents, evidence of meetings and discussions in what led up to the meltdown. He should though not Governor at the time, have access to archive records and be able to grill his peers?

But he is questioned on none of this!


Honahan reflects on a letter he wrote in Feb to the inquiry in which he speculates on the actual costs  if the government in a hindsight scenario if they ‘had been convincingly advised’ of the likely actual magnitude of the costs of the guarantee.

The government had no information at hand indicating the actual likely magnitude of the cost of the guarantee.

Honahan refers to a letter he wrote in Dec 2008 to Brian Lenihan “hard to avoid the conclusion if this reasoning is correct that Anglo is insufficiently capitalised, should be intervened and wound up”.

Note he distances himself from the Irish Central Bank  as he was not Governor of the Irish Central Bank at the time but a university professor and an academic.

Honahan also gives the view that without the guarantee ELA (Emergency Liquidity Assistance) could have been extended to the Irish banks by the ECB.

Clearly ELA would have led to a much lower cost to the Irish economy compared to sudden meltdown and collapse. ELA could have stabilised the banks and avoided the odious ‘promissory note’ and odious token interest rates imposed by troika bailout.

For his role in negotiating such odious and penal token interest coupons on Irish debt, his obedient compliance and lack of backbone in negotiating a better deal; for jumping ahead of Brian Lenihan in announcing bailout, he should have been fired. In particular, he should have been fired for his role in laundering the €30bn of Anglo promissory note into long-term bonds sealed by contract the current Irish government laughably claim as having a major part in the saving of €50bn against the total cost of Irish debt.

We are still awaiting the arrival of Enda Kenny’s spreadsheet describing the nature of these savings! It won’t be arriving soon or ever.

Its questionable whether the Banking Inquiry …

“Deputy Pearse Doherty, Senator Sean D. Barrett,
Deputy Joe Higgins, Senator Michael D’Arcy,
Deputy Michael McGrath, Senator Marc MacSharry,
Deputy Eoghan Murphy, Senator Susan O’Keeffe.
Deputy Kieran O’Donnell,
Deputy John Paul Phelan,


…have the competence to deal with a wily performer of the calibre of Honahan who can jump willy nilly between three roles, Governor of Central Bank, university professor and author of the Honahan report.

We simply need to know 3 things:

1. who proposed the banking guarantee

2. who supported it

3. why is this being covered up?


A more likely source of information helpful to unearthing the answer to such questions should come from the ninth governor of the Central Bank of Ireland


Perhaps Tony Grimes, David Begg, Gerry Danaher, David Doyle, John Dunne,
Jim Farrell, Alan Gray, Brian hillery, Patrick Neary, Deirdre Purcell,
Dermot O’Brien, Brian Halpin, Directors of the Central Bank of Ireland under its Governor, John Hurley, could be individually brought before the Banking Inquiry in closed sessions, to make statements on the role of the Irish Central Bank in its management of the Irish economy and in its relationship with ECB.

Begin with the following piece of rubbish stamping approval on ‘healthy’ Irish banks.

“After a long period of extremely buoyant conditions, global financial markets experienced a substantial adjustment in the second half of 2007 and into 2008. The proximate cause for this correction was the downward valuation of securities linked to sub-prime mortgages in the US. Central Banks responded decisively to counteract this with the ECB in particular taking effective action in the light of the pre-existing arrangements that ensured banks had an extensive range of collateral that could be used to access central bank liquidity through the normal tender process. The Irish financial sector was, of course, impacted like all others by these global developments. Medium- to long-term funding was not as readily available on wholesale markets as had been the case. However, Irish banks have negligible exposure to the sub-prime sector and they remain relatively healthy by the standard measures of capital, profitability and asset quality. ”

We need Hurley and each member of the Board of the Central Bank at that time before the committee to explain how Hurley got this so wrong. What was the effective action taken by the ECB to protect Ireland? What advice re the ‘guarantee’ was given by the Irish Central Bank? Why did it not stop the guarantee and handover to the ECB for ELA? What oversight did it exert in monitoring  the Irish banking sector.

How did Hurley and colleagues contribute to the tanking of the Irish economy? How did they allow the ‘Irish guarantee’ become the pawn protecting the knights of European banking in Germany and France and the US; how did they allow Ireland to score the greatest own goal in global financial history?


The banking expertise of members of the Banking Inquiry committee must be questionable. Professional expertise beyond political competence is required to dig deeply into veins of truth and sieve out the answers we need.

 The Banking inquiry requires more professional expertise.
Why are people of the calibre of Bill Black sitting not sitting on the Irish Banking Inquiry?
Is it to protect government from revelations of political corruption in the awarding of developer loans that stoked the Irish property bubble? Were certain stakeholders out to protect their own savings in Anglo irrespective of any cost to the Irish taxpayer. Lots of Irish institutional and private stakeholders stood to lose their deposits in Anglo.
We need people on that committee of this calibre:

“He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.Black developed the concept of “control fraud”–-frauds in which the CEO or head of state uses the entity as a “weapon.” Control frauds cause greater financial losses than all other forms of property crime combined and kill and maim thousands. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae’s former senior management.”
 Or we have political show boating, entertainingly nuanced disingenuous cover-ups of the activities of incompetent and corrupt bankers feeding incompetent and equally corrupt political handlers with developer loans from hell. Again.

Its one thing failing, its quite another not knowing how  failure took place or putting in place failed austerity measures guaranteeing failure into the future.

Beware those untouched by recession and austerity who preach austerity for others claiming austerity pills for others are working while the economy is slowly getting better thus making life more agreeable for themselves alone…
till again

Who Done It?

March 1, 2015

During the week we had David McWilliams before the banking inquiry:

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Good McWilliams gave account of his dire warning re collapse of the housing bubble in Ireland in years leading up to 2008-10. Very bad he advised government on a guarantee however subject to conditions and limitations he meant this to be. Very ugly in hindsight he does not accept what a mistake he made.

According to McWilliams what he advised was a ‘limited guarantee’ made subject to conditions perhaps lasting only a few months. However, such a ‘limited guarantee’ would merely message all stakeholders to get their money out asap before the door closed.

The guarantee must have sounded like manna from heaven to Brian Lenihan as he listened to this advice. Lenihan would be aware that depositors from large institutional stake holders to property developers with large tranches of their money secreted away in storage in Anglo, to small depositors stood to lose out big time. How many government ministers had their savings locked into Anglo with  gilt-edged promise of security of former years?

The stage was now set to bet the financial well-being of the state against the financial well-being of the banks.

The state would lose in one of the greatest financial own goals of history. Clearly McWilliams is a lesser man than the man required to confess to such a mistake.

But what should McWilliams have advised?

Clearly one of the largest stakeholders involved in the calamity facing the Irish banks was the ECB. Because exposure to the crash of 2008 and exposure to losses faced by the Irish banks was upward to 40% of total losses, European banks in particular both German and French banks, should have been consulted by way of consultation with other heads of government through their role in the European parliament.

A joint decision should have been commissioned at European level. We have to believe the advice would have been strictly against a blanket guarantee that would cripple the Irish state and bring about its financial collapse.

This would have protected Ireland’s interests giving Ireland the security of a fair deal that would have to be passed and ratified by fellow members of the European parliament.

Ireland would be protected against a foolish own goal giving credence to the view that Ireland brought its own calamity upon itself.

The deal for Ireland would have to be a deal that would be offered without prejudice to any member of the European parliament.

Clearly the deal would not have meant that Ireland would sink itself with a guarantee that turned a banking crisis into a financial meltdown that would force a bailout of €67 bn with odious and penal interest rates  seeing  shares in French and German banks leap 24% overnight on the news of ‘the guarantee’.

Brian Lenihan was given a dodgy hose with holes in it fed with taxpayers money to feed the banking spending spree for the rich. The fire brigade was never called.

“The existence of orderly and transparent debt work-out mechanisms would undoubtedly provide a more appropriate platform to resolve sovereign debt crises in more optimal ways.”

Ireland squandered its opportunity to force an orderly and transparent debt work-out mechanism fair to its citizens.

Obedience, compliance, subservience and incompetence became the mantra of the time with taxpayers being foolishly extolled to ‘take one for Europe’. Parish pump politicians revealed their fragile weakness.

No doubt critics of this approach will point out there was no formal means for dealing with such crises in Europe.

There was no banking union with which better strategies could be effected.

In its absence the European Commission, International Monetary Fund and European Central Bank, who formed a group of international lenders laid down stringent austerity measures that became the groundwork to resolve later crises in Europe.

In this way the collective could be protected from responsibility and blame and punishment levied on those on brink of meltdown. The collective revealed it was run by German banks and the Bundestag with priority given to the outer core taking a hit to protect the inner core; not the other way around.

This would divide Europe further.

The irony of this is membership of the European union was guaranteed to give stability and avoid such dangers for its members.

The outcome of this for Ireland has been a regime of brutal austerity the European commission itself warns is not working.

Full report on Ireland located here:

“In Ireland’s case that translates as high levels of public and private debt, ongoing issues within the banking sector, in particular continuing losses, and high levels of unemployment.

The commission has a six-step imbalance procedure by which it grades the severity of the macroeconomic issues facing each country, with one being the lowest and six the highest level on the scale.

Ireland is currently at four, which is down from six over the past two years.”

The FG/LB coalition in Ireland speak of ‘fragile recovery’. Recovery which protects the rich, creates further divisions between rich and poor, is fragile.

The property market has returned to the mistakes of the past with shortages fuelling a housing bubble in Dublin and in large urban areas throughout the country.

Broken banks are feeding off the frenzy turning induced shortages and evidence of a property bubble into the false propaganda ‘the tide is on the turn’ and recovery is taking hold instead of the return of a malignant financial cancer fed previously by free lending now fed by shortages fed by incompetent government policy.

The banks and the property market exist in a catch 22 limbo. If property prices fall due to a new construction boom, the capital base of the banks will be negatively impacted due to greater numbers falling into negative equity.

If property prices rise as they are now, high levels of public and private debt will put further pressure on the banks.

The solution is simple but unpalatable to the wealthy. Greater investment providing for the needs and well-being of the majority with a much fairer proportion of taxation taken from the rich by way of Capital Gains Tax, Corporation Tax, and tax on high earnings. This should pay for a fairer society with increasing numbers required to staff hospitals and schools and frontline public services.

But above that we require debt write-down that goes further than ‘extend and pretend’. Taxpayers should demand write-down of unfair and odious debt. But this FG/LB coalition elected with this one mandate above all else, has failed miserably to deliver real write-down.

Instead we are treated to the current propaganda of Enda Kenny telling the public the coalition have saved the Irish taxpayer €50bn.

We’ll have to await forever for the accountancy exercise that itemize these savings. An uplifting sense of humour is required to swallow your disbelief at such illusionary and delusional politics.

The irony is Irish taxpayers pay almost equal amounts of tax to that paid by their peers in France and Germany. But this provides for virtually free healthcare in France with a visit to a GP costing €7 compared to €60 + in Ireland not including purchase of medication.

The solution to this dilemma espoused by the European commission is for member states to carry out structural reforms and continue to consolidate their public finances. This is european, eurospeak for ‘austerity’.

Structural reform is a euphemism for radical overhaul of the public services. Under the mask of making the system more professional and efficient a culling of numbers working for the public sector is planned. Bureaucracy and paperwork becomes an industry impeding the delivery of services under pretence of reform.

Statistical and percentile analysis of the impact of paperwork and bureaucracy on existing services providers is non existent.

Nurses spend all their time filling out forms describing how patient A was given a cup of coffee. The system keels over into a trolley service in Ireland with the unimaginable now accepted as normal.trolley

The idea that any human being be left waiting for a bed on a hospital trolley should be anathema to any civilised person.

Clearly the European commission’s recipe of cutting state deficits means cutting and culling public services. It is drawing Europe into a future with Ireland as its poster boy. The economy is run and controlled by the banks, for the banks and of the banks.

The taxpayer is drawn into the role of bank serf with one rule for the bank serf and another rule for those who wield financial paper where the rules of morality including rules of capitalism, do not apply. No tax for the rich, deregulation for the financial industry, more regulation for the poor taxpayer.

Where write-down of debt exists for the rich; no debt write-down exists for the poor.

Now the banks have their fingers in the greasy till (Yeats September 1913):

What need you being come to sense,
 But fumble in a greasy till,
 And add the halfpence to the pence
 And prayer to shivering prayer, until
 You have dried the marrow from the bone?
 For men were born to pray and save:
 Romantic Ireland's dead and gone,
 It's with O'Leary in the grave.

The banks of Europe are set on a path to dry the marrow from the bone, to plunder public services for taxpayers, to repay odious debt.




The FG/LB coalition are trying to ram through with medical organisations what remains of their universal healthcare policy, namely free healthcare for children up to the age of 6 yrs. Cost of this daft proposal is approx €28ml about what extra is required to end the debacle and calamity of trolleys in the A and E’s. It’s a boon to first time parents who without much experience in such matters, will regard every cold as reason for a visit to the doctor.

Given local medical practitioners, already stretched with waiting lists, will deliver this service, you better look out for long queues, if you require a doctor, if there are any left around.


Till again.


Market Manipulation

February 18, 2015

“Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency. Market manipulation is prohibited in most countries, in particular, it is prohibited in the United States under Section 9(a)(2)[1] of the Securities Exchange Act of 1934, in Australia under Section 1041A of the Corporations Act 2001, and in Israel under Section 54(a) of the securities act of 1968. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security. Market manipulation is also prohibited for wholesale electricity markets under Section 222 of the Federal Power Act[2] and wholesale natural gas markets under Section 4A of the Natural Gas Act.[3]

Along with zero hour contracts JobBridge has now been exposed as a way not to be a bridge returning people to employment, but as a way to displace jobs, provide virtually free “slave labour” for employers. The scheme means if a person is out of work for a certain period of time, eg 6 months that you have to work 20 hrs a week for an extra €50 to stop you from losing the Dole? Primary reason for this is to get people off the live register and manipulate the employment statistics.

“The Department of Social Protection confirmed that 284 interns – roughly divided between the sexes – have worked in various departments since the back-to-work scheme began in 2011. – with 269 completing their internships.

Of those who finished placements, 69 progressed to employment with other companies, but just three were hired at their host departments.

Clearly where there is a recruitment moratorium in the public sector, such departments should be banned from participating in the scheme. Likewise private companies who abuse the scheme should be investigated if complaints and abuses are verified.

This blog has highlighted the “zero hour contract” as another means of manipulating employment statistics. For approx €30 euros employers can download a ready-made document whose highlights include, no normal or fixed working hours, agree to work at any place, termination with one weeks notice. trial period.

‘You may not do other work(even voluntary work) or engage in any other business’. Is this not a charter for slavery?

You may have problems if you see abuse and highlight this to say an ombudsman as you’e signed a contract preventing you from “bringing the company into disrepute/breach confidentiality”.

Of course manipulation goes deeper than manipulation of employment statistics. At the Banking Inquiry  John Fitzgerald said ESRI failed ‘to see the economic collapse’. This blog has continuously highlighted the failure of the ESRI to act as an objective and scientific provider of reliable statistics on Ireland’s economic performance.

ESRI continues to make absurd and over optimistic claims of economic performance for this economy with growth rates of 4-5% for the coming year in the face of water charges, property taxes and looming Grexit for eurozone.

The mea culpa of John Fitzgerald should require root and branch changes in ESRI or the creation of a more reliable agency for analysis and economic prediction. Either that or we can propose for each of the eurozone members a bailout of minimum €67bn so we can all avail of 5% growth rates and forget about austerity and recession.

In Business 4, Sunday Times, 15.02.15 Cormac Lucey includes a bar chart with Ireland’s debt to GDP ratio of 390% only slightly behind highest Japan at 400%. Significantly, Japan finances most of its debt from within Japan, itself, so let’s put Ireland top of the chart. On the other hand, large amounts of Irish debt are owned by multinationals, so Lucey rightly proposes GNP as a better denominator. This brings our debt to GNP up to 345%.

This is a huge drag on our economy never mind the externals such as growing deflation in the eurozone. Why are we not complaining like the Greeks? According to Lucey,

“In an interview with the newspaper DerSpiegel abouts Greece’s debt crisis, the former German Central Bank head Karl Otto Pohl said this “was about protecting German banks, but especially the French banks, from debt write-offs. On the day the rescue package was agreed, shares of French banks rose by up to 24%”.

The Irish government has been a significant supporter of Ireland’s debtors and is a direct supporter of NAMA. This ‘bad bank’ is now playing a significant role in manipulating the Irish property sector to the detriment of both debtors and lenders into the Irish economy”

‘The National Asset Management Agency (NAMA; Irish: Gníomhaireacht Náisiúnta um Bhainistíocht Sócmhainní) is a body created by the government of Ireland in late 2009, in response to the Irish financial crisisand the deflation of the Irish property bubble.

NAMA functions as a bad bank, acquiring property development loans from Irish banks in return for government bonds, ostensibly with a view to improving the availability of credit in the Irish economy. The original book value of these loans was €77 billion (comprising €68bn for the original loans and €9bn rolled up interest) and the original asset values to which the loans related was €88bn with there being an average Loan To Value of 77% and the current market value is estimated at €47 billion.[1][2]‘ (See earlier blogs for critical analysis).

Vulture fund activity concerning NAMA with large tranches of commercial portfolio property segments laundered into sales abroad have raised eyebrows in the recent past and should be further investigated but secrecy surrounds such transactions.

“”Developers are being banished out of here in the name of the taxpayer. They are being forced and threatened into a state of silence but it is time to speak out. Nama will be proven to be the biggest mistake we ever made.” David Agar

“This weekend, Mr. Flynn described Nama as akin to North Korea: “They are an evil empire, a cancer on the economy and on the country and I believe that, honestly. They are answerable to nobody.

“They have sold assets and told people to sell assets without hearing them and those assets must be worth more now. So the question is: if they did it and acted unlawfully in doing that – are they going to be liable for damages?”

In particular, NAMA has now been accused of property market manipulation:

‘”You are aware of the significant shortfall in housing supply in certain areas. This was money83anticipated by us and others and reflected in our business plan but rejected by Nama who considered themselves to have greater expertise in this area and refused to listen to those who have extensive experience of the market and planning for development,” Mr O’Flynn wrote.

Referring to the responsibility he believes the agency must bear for the current and chronic housing crisis in Dublin and elsewhere, he added: “Nama did not then nor does it now have the expertise or the skills necessary to operate as developers as is evident from the housing shortage which has arisen when Nama was the dominant player in the property market.”

Commenting on Nama’s future direction and indications that the agency will become more directly involved in property development, Mr O’Flynn said: “I note with considerable concern some comments made in relation to the future direction of Nama and wonder if anyone has stopped to consider the impact on the property industry generally and the Competition Law issues which would arise from such a development.’

In order to inflate current house price values and preserve the capital ratios of banks, NAMA is now exposed to charges of denying a generation of young people the right to own property.

Truly the financial paper merchants have succeeded in annexing the democratic freedoms and rights that should be part of our capitalist economy and created in its place an extreme socialist dictatorship  of financial manipulation akin to the worst excesses of the USSR. We should not be surprised at signs met on the road to slavery such as “Zero Hour Contracts” in our new socialist state for the banks.

till again



Getting Black

February 9, 2015

mountainNoticed Simon Coveney recently being hauled out to make comments on Finance. He’s a great Minister for Agriculture, Food, the Marine & Defence, but to be frank, he hasn’t a clue about economics.

For example, he is now frequently to be heard peddling the view that FG/LB have saved the Irish people over €50bn by renegotiating our debt in particular ‘the terrible deal done by the previous government re the promissory note’.

Unfortunately, though tremendously gifted wearing his other hats above, on economic matters he is dead as a dodo, but not more so than Enda Kenny.

To illustrate my point, let me instantly gift you €60 bn in savings on what you owe me. You owe me €160bn, which means now you only owe me €100bn. Ludicrous isn’t it? Yet its the same 3 card trick peddled by FG/LB propaganda as it attempts to dupe the public. It all depends on how well you can be conned into believing you owe €160bn of debt incurred by the 1%.

Take the promissory note, an odious device used to take the Anglo bondholders to nirvana at the public’s expense approx €31bn to bail out Anglo. Bondholders never liked it. Worried that a future government could repudiate this debt, they wanted it amortized into bonds under contract underwritten by international/global commercial law.

Embarrassed that more favourable interest rate tokens were given to Greece and Portugal they laundered the Promissory Note into long-term bonds and then sold the pup to our morons that extending the pretend, tiny clips to repayment interest tokens,  lo and behold we have Simon Coveney & Co telling the audacious propaganda lie, they’ve saved the Irish people €50bn.

Enda Kenny was blowing since 2012 that a bank recapitalisation deal was on the table for Ireland. Never happened. 2 weeks ago FG/LB were supporting a debt conference for Europe to support Greece. Now they’ve uturned and their position is Greece needs to tow the line and do a deal like Ireland’s extend and pretend.

Except with Greece you can’t extend and pretend. They are beyond bankrupt and their economy is unviable beyond redemption under the weight of current obligations. Severe damage through austerity is being inflicted on Greek people to pay for crimes of the 1% in Greece and elsewhere in Goldman Sachs who manufactured their fleecing.

Irish Water

Thomas Molloy writing in the Sunday Independent Business, p1 “Sources said credit approval has now been secured for another €250m from domestic and international banks…..advanced discussions with two other international commercial banks for a further €200m of bilateral loans…the utility has recently signed a €100m loan agreement with Ulster Bank”

WOW, these guys are borrowing left right and center and the money to pay for it is coming out of your pocket! Irish water is a financial paper boy dream. The opposition have called for a Dail Debate to answer q’s as to how it is currently funded. Borrowings above will be added to your bill later.

Think of all the money Irish Water are saving the taxpayer?

Continuing his reign as Ireland’s Don Quixote, Enda Kenny, to outdo the above is currently making a mess of the privatisation of Aer Lingus. He’s looking for cast iron guarantees that if government sell their stake beyond Minister for Finance retaining a shareholding of at least 25.1% that Enda will consider these.

Such guarantees carry as much weight as a Fine Gael / Labour promise before and election. Looting, pillaging, fracking of companies has gone on for time immemorial on foot of such guarantees.

The question is why the airline on foot of guarantees was not sold to Michael O Leary of Ryanair?

A very useful deal whereby planes could have been maintained at Dublin airport as a central hub of European operations along with guarantees on competitive rates and maintenance of necessary routes and further development, was squandered and squashed by Fine Gael / Labour and FF.

Our hospital ratings have slipped way below the European average and now below some central European countries. Our educational system at 2nd level is under attack with proposals to demolish external regulation and do away with the Junior Certificate. Another austerity money-saving measure masking under the guise of educational reform of all things.

Our employment statistics have been falsely corrupted and falsified with zero hour contract jobs masquerading as real jobs. Zero contract means in any week though you are contracted to be available for work, there may not be any for you that week! Salaries have been decimated with young nurses and young teachers forced to accept pay levels beneath those offered to those colleagues who happen to have other contracts negotiated before the financial meltdown.

Young people have been especially targeted by the soldiers of austerity. Generally, young people have been fairly conservative, compliant and obedient in the wake of salary cuts and increasing taxation increasing up to 75% over recent years compared with previously. 10’s of thousands have endured the brunt of negative equity and because of unemployment or pay cuts their mortgages are insolvent and little has been done to rescue them.

Unbelievably a shortage of housing in urban areas especially in Dublin has been allowed develop in spite of needed construction jobs; this has led to a boom in property prices. Yes, same boom that led to property collapse in 2008. Government have great plans to deal with this, but none for now.

Some believe it has been induced by the financial paper merchants to pretend the economy is recovering, pretend the capital base of the banks is stable and secure, prevent banks from further losses due to property writeoffs at low valuations. Young people have suffered the brunt of this and their salaries are being extorted through high rents.

Government has done little to nothing to prevent property scams selling sub prime mortgages at punitive and extortionate interest rates. The Central Bank has a lot to answer for in stoking the previous bubble and its lack of finger prints on any form of regulation that would have prevented financial meltdown.

One young TD, Paul Murphy, who has done tremendous work to help organise a nationwide peaceful protest against water charges that brought hundreds of thousands onto the streetsGary Varvel: The Administration Targeting Journalists in Ireland over the past 6 months, was arrested at 7am this morning by six gardai.

His alleged offence was he was wanted for questioning in regard to an incident where Joan Burton TD, leader of the Labour Party and a member of the Economic Council who run the financial affairs of this country on similar lines to the Politburo standing committee that rules China, was detained by protesters and suffered verbal abuse for a number of hours in her chauffeured car in Jobstown, Dublin.

He was brought to Terenure Garda station for questioning. Democracy is being replaced by police state methods of control and intimidation of democratically elected politicians preaching peaceful protest!

Demise of Euro 

Demise of the euro continues its slow titanic disappearance beneath the waves. Trillions in financial paper derivatives sloshing around the world are destabilising currencies around the globe. The ruble, the Swiss franc and currently Greece are targets of speculators with access to mountains of financial paper that manipulates world currency markets.

Such instability is not a recipe for economic sustainability or human progress. The sooner the paper mountain crashes and is replaced with something more solid and secure the better for Greece and the euro.

The euro has been and continues to be an unmitigated disaster. Cormac Lucey in Economic Outlook, Sunday Times, Business P4 08.02.15, writes:

“An  2008 OECD research paper, Monetary policy, Market Excesses and Financial Turmoil, looked at the impact of common eurozone interest rates, inappropriate to national circumstances, over the years 2001-6. The researchers found a correlation in excess of 80% between the inappropriateness of interest rates considering national circumstances and the increase in national housing and construction investment for the 10 eurozone members, including Ireland, surveyed.”

Lets face it, the eurozone is just one big Lehmans full of subprime lending to its own members.

Its been made worse by divide and conquer bailouts that are making matters worse with the 1% moving into more control of the 99%. The real economy flounders while the world of financial paper bubbled by QE masquerades as a false economy pretending it is real through methods that are becoming more police state as time goes by.

The original ideal of the eurozone was to level playing fields between the members in particular those on the outer core vs inner core.

Instead mountains of debt have been driven between outer core and inner core members to unsustainable levels.

Meanwhile the Irish Banking Inquiry continues. If you would like to read transcripts or entertaining videos see them here

Transcripts are here:

Prof Bill Black starred last week stating Irish Banking guarantee was the worst financial own goal in history; the collapse with decent regulation could easily have been prevented.

He argued behind banking collapse generally you find CEO’s driving collapse.

In Ireland’s case we need to microscope the Central Bank, the ECB, the Regulator and Irish government tampering in economic management and regulatory matters.

Better way of course to do this is to examine the bank executives themselves and follow the trail led by some of their loans….but we won’t get that.

Gresham’s Law describes bad money driving out good money. The euro has brought about ruin for many in Ireland. Perhaps financial meltdown was worth it in terms of our european membership of the euro area.

In terms of loss of sovereignty and our current debt levels and ensuing losses exported onto the shoulders of our unborn, in my view, it has been an unmitigated disaster growing by the day.



QE Sinks EU

January 26, 2015


“The monthly purchases of €60bn through September 2016 will probably comprise about €45bn in investment-grade sovereign bonds, €5bn in the debt of euro-area public agencies, and €10bn under existing programmes to buy asset-backed securities and covered bonds, an official said.

If it isn’t meeting its inflation objective, the programme will run longer, said ECB governing council member Visco at the World Economic Forum in Davos, Switzerland.”(1)

The headline value for the above spend is about €1.14 trillion.

It won’t work. Though on paper propagandists will claim it is working. How can this be? Welcome to the global Ponsi scheme of debt.

QE is designed to bring about inflation which in turn is claimed will bring about an end to looming deflation in the eurozone.

Deflation makes everyone’s debts greater and drags down economic activity.

What it will do is create paper inflation by giving opportunity to big banks to race back into the casino and purchase gambling shares in stocks/shares/derivatives and other financial paper trail investment vehicles creating the illusion all is well with the global economy.

Banks will compete with each other driving up the cost of financial investment paper and create the illusion of a resurgence in economic activity. Those who work in the financial services industry will beam with myopic delight for a short time. Those who work in Ireland’s financial services industry will look for crumbs to vindicate its success. 250,000 Irish emigrants returning their wages to those left behind will be used to falsify figures on resurgence of economic activity.

European banks’ shortage of funds weighed down with debt inherited as far back as 2008 from the Wall St crash and loaded with debt from their own property bubbles, in theory will be able to better service such debts.

But the purchase of bonds to alleviate debt accompanied by greater investment in the stock market will not address the fundamental problems of the eurozone’s economy. Though touted as the injection of further lending to businesses/SME’s sparking economic resurgence, it won’t happen. Banks will not lend to people sinking because of austerity.

The fact is global business is not dying from thirst for lending for investment/expansion purposes. The goose that lays that golden egg is dead. That goose is the economy flatlining because of austerity.

It would have been better if Draghi flew helicopters filled and bagged with billions of euros and scattered them to the four winds over towns and cities. Either that, or write down the debt that is suffocating millions of individuals across the eurozone.

G8 requires a world debt conference to surmount the mounting debt crisis created by the fiat money system hampering economic activity and mankind’s future progress. The mantra should be ‘freedom from debt slavery’. Currently China expected to lead the world out of its debt zone, is a leading economy about to join the queue of debtor nations exposed to the turmoil of deflationary trends.

One other possibility for QE that might help is fiscal expansion, but ridiculously the mantra of austerity soldiers, is that fiscal expansion contradicts austerity, even though austerity is failing in plain sight. Austerity without debt write down is like having your cake after eating it.

Governments from Greece to Spain, Portugal, Italy and Ireland if infrastructural projects were undertaken to end the housing crisis (eg Ireland -) or invest  eg water (new canal/pipeline to renew Dublin’s water supply, Hoover Dam), employment levels could be improved and economic activity expand arising from this.

Instead money is being poured into useless financial paper that ruins real economic activity, hoovers up assets/resources of the poor into the hands of a smaller so-called elite of the super rich. This is a threat to human progress.

The fact that nobody is buying is causing a financial undertow threatening to bring outer core eurozone countries such as Greece, Latvia, Slovakia, Portugal and Ireland under water with unemployment rates hovering  26% – 55% among the young with corresponding huge social welfare bills up to high percentage of GDP anchors.

The property sector in Ireland has become absurd with property prices beyond the reach even of young professionals required to put up in advance €40-60,000 for an average home. The banks control politicians who take orders from the banks to keep property prices high to protect their capital base.

Debt is controlling economic activity restricting movement with extend and pretend and the long fail. This is not working for Ireland or the eurozone. The value of the euro is being compromised on world markets. Why should anyone save for the rainy day when the false economy of low interest rates is mounting mountains of debt.

G8 should introduce a bankruptcy clause capping the amount of debt a country can carry. Debt beyond the ceiling should be written off. Global currency currently being eroded by growing stock piles of debt, needs to be strengthened. We need the opposite of race to the bottom QE. If the global currency system benefits only a small elite and is detrimental to human progress, We need a better system.

Strong consideration should be given by the eurozone to the return of the euro to a more stable monetary system such as that based on the gold standard. This is not without precedent. Consider UK’s return to this system following the Napoleonic wars. A new Breton Woods to bring about this objective is urgently required to prevent the long fail of the eurozone.

News    – Striking Teachers (Shrinking Education and Health Service)

Latest target of the austerity brigade are the teachers striking  22/01/15. Propaganda from government is the usual, ‘teachers are striking because they oppose proposed reforms of the education system at junior level’.

In propaganda terms meaning becomes inverted, as George Orwell in ‘Big Brother’ and ‘Animal Farm’ describes, ‘black’ becomes ‘white’. ‘Destruction’ disguised as ‘reform’.

Teachers are striking  to vindicate the right of young people at the Junior Certificate/cycle level to objective and independent assessment of their coursework, something that has served the Irish education system almost since the foundation of the state. Pity we did not have this for our banks!

Teachers are not against properly funded modernisation and true reform of the education system. They are against ‘self assessment’ of the educational system leading to corruption of standards, unjust and unfair pressure on both students and teacher.

So called ‘reforms’ of the Junior Certificate are an austerity gambit put in place to save money for the state.

If they could save money by doing away with all state exams and load all the bureaucracy of designing and setting examinations and correcting them onto teachers and students, they would.

Self regulation of the education system has about the same potential for success as self-regulation of the banks.

News  – Pathetic Banking Inquiry Cover Up

Banking Inquiry continues its peripatetic way with Professor Honahan of the Central Bank before it. Called on to resign on numerous occasion on this blog, instead Honahan has become the darling of the inquiry, entertaining because of his wit, his erudite and beneficent charm and wry humour. He should never have left academia.

He has even supported the burning of bondholders! True to form though his stance has been the same as others before the tribunal blaming ‘us all’ for the bursting of the credit bubble. ‘All’ being politicians, regulators, ECB, developers, those addicted to property’.

Of course this ‘blame all’ mantra is all rubbish. If truth be told, we are not going to get much more than this rubbish at our so-called ‘banking inquiry’.

What we have is the regaling of old wives tales of wuda, cuda, shuda dodging flying bullets in the blame game in another financial coverup. We do not get any more than the public already know.

Ernie Madoff of Enron was a master of this form of opinionated spooning before the fall of Enron.

Enron was on public tv giving seminars in the US,  ‘how to be a successful company’. Even the guys in PR, marketing did not know what was really going on, in the back rooms of Enron as the financial logs were falsely manipulated.

The only way to hold a banking inquiry is to take 10 of the largest loans and follow the money.

(2)Drumm may be indited for perjury because reading the judgment of Judge Frank Bailey, it appears that the Judge believes that only some of the divesting of assets have been discovered. What other concealed assets are involved? The case goes on.

The point is the judge has access to the financial records that tell the real story. He doesn’t have to rely on 2nd and 3rd hand propaganda that has a self-interest in cover up or frankly depends on hearsay from whatever source.

No doubt commercial sensitivity/privacy laws will  plead the impossibility of this approach.

Sometimes when there is a will, there is a way; no such will, then no way. Expect a cover up.

News – ‘Ireland—Lessons from Its Recovery from the Bank-Sovereign Loop’

However, to avoid any acrimonious distaste on the part of the Irish public in the wake of any embarrassing revelations in the ‘banking inquiry’ we had during this week, we had invitation only by the IMF, hosted in Dublin by IMF, a propaganda fest: ‘Ireland—Lessons from Its Recovery from the Bank-Sovereign Loop’.

Noonan  wondered giving the apparently quicker recovery of US economy compared to eurozone, were there lessons to be learned? One lesson from Lehmans is you do not try to recapitalise non viable banking black holes eg Anglo.

Another is you try to offload as much debt elsewhere as you can.

US managed to export much of its debt to European banks, not a lot to be learned from there as eurozone exported 42% of its banking liabilities in the crisis to Irish banks and on to Irish taxpayers.

Exercise in mutual and self-congratulation, back slapping and show boating took place in Dublin Castle, conference location. The Irish taxpayers their pockets plundered and picked by austerity soldiers, were commended for their bravery!

Still smarting at their betrayal by FG/LB the response of the Irish public to water charges, property charges, USC is one of brave revolt rather than cowardly compliance shown by poor leadership.

Ann Nolan Department of Finance was in fine form savouring the disastrous the bank guarantee…”wasn’t the worst outcome that could have happened..”

Dublin Castle, Main Conference Hall, Ireland

January 19, 2015

In a question re debt write-offs, “Were efforts made (6bn written off) to set targets for debt write-offs? Representative from ECB said ‘you cannot have a target for debt write offs’.

Oh really, Iceland have already done this with average savings of €24000 per stricken household (3)

A similar deal should be immediately put in place for Greece, Portugal, Spain and Ireland, to bring debt down to sustainable levels, end ‘extend and pretend’, end suffocation of economic activity and enterprise, restore fiscal balance and a stable currency, return life to the eurozone.





News – Greece

(photo Panos Kammenos and Alexis Tsipras share an opposition to Greece’s international bailout terms

Congratulations to the people of Greece in saying No to austerity enslavement.

“The far-left Syriza party, which won Greece’s general election on Sunday, has formed an anti-austerity governing coalition with the right-wing party Greek Independents.

The coalition will have a comfortable majority in Greece’s new parliament.”

They are a ray of hope that contrast with Ireland’s compliant, obedient poodle politicians who do not even recognise their own humiliation;  reduced to showcasing Ireland’s role as poster boys of austerity for the IMF and troika.


I am Charlie Grexit

January 11, 2015

deflationThe euro has tumbled in world markets its decline accelerating in recent months from a high of $1.3993 last May to $1.1868 over the past few days stimulated by fears of a Greek exit and the failure of Mario Draghi’s negative interest rates and austerity to reverse its downward spiral.

Fuelling the decline is speculation of an imminent announcement that a stimulus of up to 1 trillion euros is on the cards.

Figures show deflation is taking hold across the euro zone.

Why this is bad, explained by Paul Krugman here

The effects of low growth are magnified with higher unemployment rates exacerbated in the euro zone by public health, education and social security programmes eg

The cost of entitlements have a deeper effect in the euro zone than in the US where half of US citizens got little more than one day’s vacation over 2014. Morality demands the population be served by government not exploited by a slave owning elite.

Further deflationary pressures are caused by falling property prices. In Ireland this has led to pressure from the Central Bank and government to stimulate this sector through dubious means.

Asset purchases from NAMA through foreign vulture funds combined with shortages due to lack of construction, lack of lending into the property sector, a hike of 20% on required deposits for mortgages maintain asset prices through induced shortages, have created a market that has priced real people out of the market and made it the domain only of the super rich.

A market depending on the spending of the super rich and excluding ordinary people is a dysfunctional market that cannot last long. There are fears a whole generation will be condemned to renting from a rental market controlled by vulture funds and the rich as property is put beyond the reach of ordinary people.

It’s likely that austerity is the euro zone will put further pressure on indebted members to cut the cost of public health and social security programmes forcing countries to change their Health Service Executive into Trolley Service executives.

Government bonds under increasing pressure eg Greece to find buyers on international markets through negative perceptions re decline in the euro zone, will force pressure on Draghi to be buyer of last resort and thus lead to massive QE for Europe.

What are the implications of QE for eurozone?

One effect of QE is to drive bond prices higher and bond yields lower. This could have a negative effect on the eurozone. If the stimulus were a success, leading to stronger economic growth and inflation, then bond yields could rise as happened in the US as investors assumed economic growth and inflation would follow.

It’s a risky business but it may be the only card left to play in the eurozone’s last chance saloon. Its more likely to fail as countries such as Greece weighed down by massive debt forcing growth into the long stall, demand burden sharing and force default. In turn, this will create pressure on other countries such as Spain, Italy, Cyprus and Ireland.

Figures for 2014 show prices across the euro zone falling into deflationary levels. The effect of this is to worsen the plight of countries and individuals heavily in debt. Spending is put off in expectation of further price falls. Contracts large and small are forced to go for tighter profit margins. Prospect of Japanese stagnation and slow decline beckons.

Growth can no longer save economies already doomed with insurmountable debt burdens.

Add to the above mix the prospect of imminent defeat of right-wing parties in coming elections. From the certain defeat of Enda Kenny in 2016 to the imminent defeat at the end of this month of Greek premier Antonio Samaras both poster boy proponents of the poisoned chalice of austerity.

In Greece the left-wing Syriza party is likely to win. Alexis Tsipras has led Syriza with the banner of 50% write down of Greek debt.

Write-down sends shivers  leading to  euro tumbling in world financial markets.

Recent measures to build walls around the euro with the ESM are not built to withstand Greek default that can spread contagion to Spain, Cyprus and Italy.

It’s likely Draghi will try massive QE to stimulate the euro, stem the outflow from Greek debt write-down demands.

Part of the developing scenario may mean stay/go negotiations with Greece with no debt write-down on the table for Greece.

In such a situation Tsipras may steer Greece out of the euro looking for support from China and Russia with the euro zone choosing to sacrifice Greece to save itself.

Whether Greece stays or goes massive buying of government bonds through QE may then save contagion from spreading to other peripherals such as Spain, Portugal, Cyprus.

However, QE for the euro zone is not without its risks.

In Ireland we’ve experienced the side effects of US QE with foreign vulture fund activity in NAMA buying everything that moves. It’s likely that the purpose of QE to stimulate economic activity will stimulate the wrong kind of activity with negative downside.

Contagion of shadow banking with $600 billion only in collateral chasing trillions of derivatives blighted by cross puts similar to  mortgages in Ireland when paper deeds from single properties were used over and over again to leverage more and more blighted assets, is a tinder bed in shadow banking ready to ignite. Perhaps Grexit could lead to worldwide stock collapse of the bull market fed by QE.

Banks prefer the paper financial markets to real markets.

An example of wrong kind of activity is requirement by the Irish Central Bank to limit mortgages to those with 20% deposits requiring couples to pony up €80000 to acquire mortgage on €400,000 house. Rise in contract working and lack of permanent positions even in well paid employment make these mounts unrealisable for the majority.

The irony is  if prices are driven down by this requirement, if a large quick fix construction programme is begun, if NAMA releases its property portfolio into the rental market, this would have a negative impact on the balance sheet of Irish banks. The capital base of Irish banks would fall, negative equity and a deflationary spiral would ensue.

You might wonder what policy and regulatory framework gives rise to the above craziness from the Irish Central Bank?

If you are a member of the banking inquiry this might even whet your appetite to fall back to the years 2006-2008 to examine in detail the advice being given to the Irish financial markets at that time to the government, in particular the regulator, by the Irish Central Bank .

You might even want to talk to Mario Draghi or Jean-Claude Trichet to microsope  ECB involvement in the collapse of the Irish economy?

Mario Draghi has refused to come before the Irish Banking inquiry to answer such questions.

I thought there may be some answers given by Professor Honahan in his essay contribution to “Brian Lenihan In Calm and Crisis” edited by Brian Murphy, Mary O Rourke  and Noel Whelan published by Merrion Press before Xmas.

Regularly hauled out as an oracle on the Irish economy,  a  regular Rasputin to Irish tsars, the secret shadows of the Irish Central bank activities, are kept under wraps by Honahan.

No luck there, he gives no information away confining himself to prognostication on the performance of Brian Lenihan as minister for Finance under the shadowy grip of economic forces the Irish Banking Inquiry one doubts has the capacity to probe.

The Irish Banking Inquiry so far has no Judge Bailey Sean Dunne probity form. Honahan gives nothing away vis a vis ECB involvement with the Irish Central Bank.

How accountable was the ECB and the Irish Central Bank in management of the Irish financial crisis?

The compliance, subservience obedience and servitude of the Irish negotiating position is summed up by Honahan, P80, Brian Lenihan in Calm and Crisis:

“While he undoubtedly considered it a failure to have had to have recourse to a financial rescue package from international official sources, in fact, Brian deserved considerable credit for pushing ahead with negotiations without the ineffective grandstanding or attempted blackmail that some other countries have sometimes tried with the IMF. By embarking on the protection of the programme long before he ran out of cash, he enabled the Irish negotiators to settle on what has been a much more gradual path of fiscal correction than that imposed on other peripheral countries.”

Notice the way Honahan steers blame away from ECB by mentioning the IMF as lender of last resort. In fact IMF officials objected to the severity of the package offered to Ireland, but this was resisted by ECB who held sway as lenders over the IMF.

Blackmail is mentioned by Honahan, but facts show Ireland was blackmailed into agreement not to burn bondholders. Ineffective grandstanding is another contemptuous term used to try and stop comparisons between Iceland and Ireland, with Iceland succeeding and Ireland failing in falling victim to odious extortion by an elite cadre who had sold out taxpayers, to preserve their personal wealth and power base.

This is paid for currently by Irish people on trollies in A&E departments across Ireland with their health service in ruins.

Honahan’s role in vindicating the right of Irish people to fair treatment by external bondholders can be likened to that of Dermot MacMurrough circa 1120 who made his way to the Court of Henry II of England and offered to become a vassal to the King in return for military aid in retaking his kingdom.

Honahan and the Irish Central Bank negotiators retook Ireland for the ECB. They did not vindicate the rights of Irish taxpayers; they did not repudiate odious debt.

The terms of the bailout delivered to Ireland were subsequently watered down when other precedents for interest rate reductions for Greece and Portugal were set, that were less odious.

But its true, Irish negotiators gave up without a fight.

Perhaps Honahan will be brought before the Irish banking inquiry and given the same grilling Judge Bailey has given the Dunnes in the US. But I wouldn’t bank on it.33

At times, you would be forgiven for thinking Honahan was minister for Finance himself and that he had usurped that office.

The real shadow cabinet of Kenny, burton, Noonan and Howlin takes its orders from the erstwhile dictator Big Brother Mario Draghi with Honahan as underling.

For them, there is no third estate pillar of democracy with the right to freedom of information, the right to share this information with the public. This is a drift to extreme right-wing dictatorship unheard of in the past.

As if to emphasise this point during the past week, Censorship and propaganda stalked the land. 

Vincent Browne has been targeted both by Fine Gael and Labour the same week Charlie Hebdo was targeted by terrorists attacking freedom of expression in the media.

“ can reveal that the party has refused to allow of any of its candidates to take part in the debates in what has come as a major blow to the broadcaster”

Surely the seriousness of this attack on freedom of expression and blatant effort at censorship should at least warrant every independent in the Dail refusing to attend until this odious ban is lifted?

Perhaps FG/LB do not wish to be questioned on the claim of growth levels for 2015 of 5% for one of the most heavily indebted countries in the world, in the face of deflationary or no growth in Europe, hospitals without beds for citizens, teachers on strike to prevent standards from falling further, only part-time jobs in the public sector, mostly contract jobs in the private sector, induced shortages in the property sector.

After the Irish water fiasco and the burning of the Junior Cert fiasco, his refusal to allow FG/LB candidates  to appear on TV with Vincent Brown, will Enda Kenny to prevent political debate like Goebbels organise a public burning of books?


Till next time.






I suppose we’ll have to wait until next February for an update on this year’s tourism figures for Ireland from Tourism Ireland. Meanwhile if you go to their website you can read figures for “increased by +8.2% for the November 2013-January 2014 period.”!/About-Us/Press-Releases/2014/Tourism-Ireland-Welcomes-8-2-Growth-in-Overseas.aspx

Neill Gibbons CEO of Tourism Ireland “I particularly welcome the growth of +8.5% from Britain for that three-month period.”

Some figures from elsewhere with a missing archive from 2014 echo these growth claiming +7ml tourists came to Ireland in 2014.

Likewise there has been some good news here

“Despite a fall of 18 per cent in the numbers of people moving from Ireland to the UK, it continued to be the most popular destination for migrants of all nationalities, with 17,900 going there in the 12-month period.”

By far the largest proportion of emigrants to have left Ireland 2009-2014 are those in the 25-45 age group with the proportion increasing as you add in family members and children.

There has been significant migration into Ireland in those years. However, if we just take emigration to the UK, a conservative estimate of 100,000+ would have emigrated there over the past five years.

All of these people would have close ties to people left behind in Ireland. It would be fair to conclude with the ease of air travel between UK and Ireland a significant proportion of those emigrants would return to Ireland on regular visits.

To my knowledge there has been no research focusing on the status of individual visitors to Ireland; if such visitors are tourists in the real sense, or emigrants forced to emigrate and returning to Ireland desperate to keep in contact with loved ones.

Likewise there have been significant claims of a turnaround in Ireland’s economy over the past few years.

Now I know this writer has been claiming lack of independence by the ESRI and I hold the view still its operational mandate steers closer to propaganda for state vested interests than true independence. Part of this is accounted by light weight probity in regard to aspects of the Irish economy that should be of public interest.

For example, if we look at the glowing state of the Irish economy described in the ESRI winter 2014 quarterly report,

The Irish economy has seen significant growth in 2014 with improvements
observable across a broad set of key indicators. Output growth (both GNP and
GDP) is set to increase by approximately 5 per cent while unemployment will fall
to just over 11 per cent. A key feature of economic developments in 2014 has
been the particularly strong performance of taxation receipts with all major items
reporting significant year-on-year increases”propaganda

” While the continued poor performance of the
Euro Area constitutes a significant downside risk for future domestic growth prospects, we expect continued strong foreign demand for Irish goods and services next year. This will almost certainly be complemented by a significant contribution to growth from domestic sources”

Private Consumer Expenditure of €85bn 2014 compared to €83bn 2013 with a corresponding small marginal difference between net imports/exports over these 2 years, belie the wild claims for output growth above.

Public Net Current Expenditure at 2013 €26bn has dropped to €25.7 in 2014. Is this because of the savings made on social welfare payments to the emigrants of 2013/2014.

You must be joking if you expect ESRI to give a breakdown of Public expenditure in terms of bondholder payments on the national bailout!

ESRI give no figures on the wealth generated into the Irish economy by those emigrants returning money back into Ireland to pay down mortgage debt for example, or to support their families still living in Ireland.

Such is the propaganda world we live in that there are no official figures that characterise the contribution made to Irish tourism and the Irish economy by the inward and outward flow of wealth created by those who’ve been forcibly forced to emigrate from Ireland.

The lightweight research that amounts to the propaganda of the ESRI, in the absence of real probity and research into the effects of emigration and tourism on the Irish economy, should be regarded with strong caution by those among us who aim to be discerning.

Happy New Year!


Till again.


Market Implosion

December 17, 2014

Mario Draghi in announcing he will not cooperate with the Irish banking inquiry does not wish the world to scrutinise the role of the ECB in supporting German and French bondholder banks to the detriment of Irish taxpayers.

Pressure by ECB was put on an incompetent Irish political establishment in 2008 to guarantee its pillar banks based on false information Irish banks faced a liquidity crisis not a solvency crisis.

We did not have a prime minister like Geir Haard of Iceland willing to put Irish banks into receivership in order to prevent national bankruptcy. Instead, we had a compliant and obedient Irish Central Bank, Irish Department of Finance and a subservient government with cheer leaders in a “we love the euro brigade” ready and willing to underwrite all losses of the worst bank in the world, Anglo-Irish Bank(IRBC) and other Irish ‘pillar banks’, with a blanket guarantee.

The blanket guarantee would subsequently lead to the acceptance of an odious €67bn bailout under odious interest coupons from the troika. In one foul swoop the ECB and the Irish government secured German and French bondholders against losses. They couldn’t believe their luck. Irish taxpayers have been paying  through austerity for this.

Government propagandists to this day maintain this idiotic arrangement saved the Irish economy from ruin. Make up your own mind about this!

The lack of regulatory oversight of the Irish Central Bank by the ECB along with lending practices at ICB in the years leading up to 2008 should be a focus for investigation by the Irish Banking Inquiry that begins today.

Crisis Looms

This is President Vladimir Putin’s Press Statement following the G20 summit.

Of interest  are employment rates in Russia at 5% and decision to link oil to a floating exchange rate therefore limiting negative impact of any fall in oil prices in the scenario of a depreciating rouble on international exchanges.

Russian Central Bank capital reserves are strong at 12.5% of which nearly 7% is made up of gold reserves.

On the face of it, Russian Central Bank has stronger capital reserves than the FED. Its economy is not in free fall. Yet, the rouble has fallen 50% in value over the past year. It would appear real market economics are not causing this crisis, but currency speculation is.

Likewise commodity prices should be far stronger than they are. But in a virtual market of currency speculation, commodity prices are manipulated by financial speculators operating from TBTF too big to fail banks. They act in tandem with toxic financial instruments of mass destruction in shadow banking. TBTF banks should be broken up by Dodd Frank to curb speculative excess.

From his speech Putin would appear to be quite dovish looking for a working solution for the Ukraine crisis.

Sanctions against Russia have been miniscule directed against personal wealth of party members rather than the Russian economy. If Russia were to seriously retaliate in energy sanctions against the eurozone, the euro would be severely impacted. It has not done so. Such small sanctions could not cause the currency crisis.

So, what is the cause of the massive speculation against the rouble?

There has been a massive decline in the price of oil which has fallen 40-50% over the past year.

This is unexplained by supplies of shale gas stocks in the US with projections falling for the future based on more expensive extraction methods as current stocks dry up and supply declines.

“U.S. use of imported petroleum and other liquid fuels continues to decline in AEO2014 mainly as a result of increased domestic oil production. Imported petroleum and other liquid fuels as a share of total U.S. use reached 60% in 2005 before dipping below 50% in 2010 and falling further to 40% in 2012. The import share continues to decline to 25% in 2016 and then rises to about 32% in 2040 in the AEO2014 reference case, as domestic production of tight oil begins to decline in 2022 (Figure 12).”

Other volatility in the market place exists.

Speculation has been rife regarding the danger of Japanese currency collapse

Prime Minister Shinzo Abe strategy of Quantitative Easing attempting to drive down the value of the yen in order to improve exports is having a negative effect. It is having a disorderly effect on competing currencies in the region.

ECB Rate Cuts

Last week (Dec 8), the European Central Bank (ECB) said that it would cut its deposit rate — the rate paid by banks to park money with it overnight — to zero and slash its benchmark lending rate to 0.75 percent. The announcement drove the euro currency down further and pushed euro zone bank-to-bank lending rates to new all-time lows on Friday as fund managers blocked new investments in European money market funds, while other investors pulled out of the euro region in panic.”

The euro has tanked in value against the dollar though this can be explained with reference to lack of growth driven by austerity for the poor without austerity for the rich.

As currencies race to the bottom, euro, yen, rouble, consider the following scenario:

There is parallel universe, the shadow banking system, derivatives now estimated to be as high as $2 quadrillion. Much of this is money creation through QE instead of finding its way into the real economy, instead is into currency speculation and eg in commodities, gold, silver, metals and property speculation.

The raising of property prices by vulture funds puts property beyond the reach of the middle class. High prices keep the capital assets of dodgy banks intact. In essence market in property becomes the domain of the rich. A market that depends only on the spending and assets of the rich, is a market that is doomed to fail.

The property market in Ireland is broken because of the above.

Many of the currencies now under speculative attack are leveraged into derivative and shadow banking currency market speculation. Russia in order to protect its currency, is dumping much of its foreign exchange reserves. Such attacks on the rouble are having unforeseen and negative consequences for the stability of the global financial system and the stability of the dollar.

Consider the following. Suppose the rouble crashes. This means Russian exposure to shadow banking trades by way of currency speculation or other financial derivative investments, will not be repaid. Other solvent countries are arriving into this danger zone. Japan is a case in point.

Right now this is unnerving investment markets. It could lead to a collapse of the dominant currency much as speculators in Ireland were left with loans they could not pay back in Ireland’s financial collapse in 2008.

A domino effect through a falling yen or rouble, could send stocks ballooned through QE vulnerable to the pin of the prospect of non repayment of lending on their derivative books.

Its time for the G20 to prepare Plan B.

Currently the great dust cloud of debt is busy consuming currencies such as the yen and the rouble.

In Ireland its effects are felt through vulture funds ravenously feeding on property speculation commercial and private.

It has consumed the real market with young people unable to compete against the large lending resources vulture funds have access to. We see it setting up Irish Water being readied and cocooned for privatisation.

All national resources throughout the world are up for grabs as it attempts to consume all in its wake. Instead of disarming the toxic derivative time bombs, QE has poured gasoline onto the fire of shadow banking and derivative speculation.

However this tidal surge is self-limiting. The more it consumes, the more vulnerable it becomes; the more the real market basis of the local and world economy is consumed and damaged.

When the real market economy is so damaged that it cannot function in supplying further energy to the cloud of debt, the cloud will collapse.

Stocks and shares will fall in value.

Hopefully shadow banking will be reined in through a stronger Dodd Frank, through open financial exchanges licensing financial instruments, through FTT and other measures. But time is running out and the quadrillion shadow banking virtual market is like a runaway train.

Quantitative Easing has failed to rein in shadow banking. Rather shadow banking has monopolised QE for its own destructive use.

Currently QE is destructively set about its own self annihilation. We see this in currency wars and property speculation.

It will not take much of a crisis to bring about its demise.

This is a market implosion Amber Alert warning. 2015 should be an interesting year.

till again. 

Kenny’s Water Loo

December 11, 2014

punchandjudyIt’s a wonder a small group of politicians facing political extinction and annihilation at the next election have not stepped into Kenny’s office and asked him to move aside in favour of some heir incumbent to save their political futures.

A massive turnout of  40,000 by Garda estimates belied the tip of the iceberg nature of the figure with public service workers in education, health and other public services unable to attend the protest against Irish Water because of the weekday and their inability to get off work.

As government resistance to ending the debacle of Irish Water continues, further resistance from the people who spoke on Wed 10 December will deepen.

Lack of government response means a government without power led by vested interests, a Punch and Judy show, controlling the people, not serving the people.

Greece and Rome in another age were the levers upon which the world turned; today its Greece and The Ukraine.

Some years ago I had the good fortune to visit Lviv in the Ukraine and spoke to teachers from a second level school in the city. Teachers stated that most in the profession were female. The reason was that a teacher’s salary could not provide for a family.

Teachers even with a science degree could only obtain temporary work of a part-time nature. It was poorly paid. Schools were badly funded with equipment in short supply if supplied at all. They feared further cutbacks.

Economic collapse and a government overthrow replacing a democratically elected government with a puppet government whose right-wing credentials extend to pro nazi extremist armed groups, have since made matters worse for Ukraine.

And worse:

“The International Monetary Fund (IMF) has spotted a shortfall of $15 billion on top of the $17 billion bailout loan package it has worked out for the troubled country, according to reports. This black hole is especially worrisome as the world’s economies are facing slower global growth and so the appetite to help out Ukraine may dwindle – especially as the country’s economy is in such trouble.”

Inflation hit 22% in November, probably underestimated but expected to shrink by 7% this year. Its edging towards hyper inflation marked by 50% house price rises per month.

According to a leaked budget proposal

According to Simon Black,, Notes From The Field December 10, 2014 , Santiago, Chile:

“The proposal includes measures to cut public education in Ukraine from 11 to 9 years. And more importantly, education will no longer be funded by the state.

There will be no more free food for children in school or for patients in hospitals, and healthcare will no longer be completely state-funded.

The government is also proposing to drastically reduce pension benefits.

Women will have to work 10 more years in order to qualify for a pension, and men an additional 5.

They’re also proposing to FREEZE pension benefits, i.e. no longer adjusting them to the rampant inflation that’s unfolding in Ukraine.

They’d also like to do away with a number of other public services; they’ve proposed slashing the number of judges, prosecutors, and police.

They’ve even proposed reducing the number of members of parliament from 450 to 150.”

Masking economic turmoil are border issues and sovereignty issues often staged to conceal real economic issues.

In Greece, Alexis Tsipras, head of the Syriza party, in 2012 denounced the cuts in the public welfare system imposed by creditors. Since then Polls consistently rank Syriza as Greece’s most popular party, and the most likely to form the next government.

Europe is seeing the rise of anti austerity and anti-Europe parties across Europe.

“Greek stocks dropped 1 percent today after the benchmark Athens Stock Exchange Index plunged 13 percent yesterday, the steepest fall since 1987. Ten-year bond yields soared again after jumping 93 basis points to 8.18 percent yesterday, roughly where they were in April 2010 during negotiations on the first bailout.”

“Political tumult in Greece, plunging stock and bond markets, the threat of default and exit from the euro: the script is eerily similar to the nightmare scenarios of 2010 and 2011.

Debt-infested Greece skidded close to the edge then, saved by 240 billion euros ($297 billion) in emergency loans improvised by European governments led by a reluctant Germany. Now, after achieving some signs of economic recovery, the government in Athens is again teetering, provoking a fresh round of doomsday speculation.”

The austerity agenda is not working in the Ukraine nor is it working in Greece.

Looting and pillaging of the public sector by the banking sector and private sector across Europe is unravelling. The agenda unveiling of using taxpayer’s money to pay for IMF and troika bank bailout loans combined with no taxation for the rich with super taxation for the poor is crippling economies in Europe.

Europe is not out of the woods yet. Early months of 2015 should provide some startling economic events that could surprise.

Meanwhile in Ireland, Enda Kenny has sown his political Waterloo in Irish Water. The austerity agenda of reduced public services, increasing taxes and charges is leading to a looting and pillaging of the Irish taxpayer assets to satisfy the demands of odious debt and increasingly odious foreign investment.

Already rents in Dublin have risen by 10-20% fuelled in part by vulture funds buying into the rental sector and controlling prices.

Government face A Hobson’s choice of unattractive options:

They could build houses in Dublin and sell them cheaply thus reducing the average cost of both rent and mortgages. However, falling house prices would have a negative impact on capital assets of the banking sector.

They can do nothing. They can do nothing and choose to be the puppets of the international and local banking and financial sector. This requires little competence and is the tool of choice for actors in a Punch and Judy show with invisible hands controlling their role in propping up a failed local and international banking sector.

Kenny’s leading of FG/LB in his charge of the Light Brigade against the will of Irish taxpayers will consign his party to the same fate as that of The Green’s, Labour and Fianna Fail.

It’s now time to think independently.

till again


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