Enda’s Cardigan?

March 2, 2011

Didya see the Primetime interview with Prof Honahan last night?

As we all know Honan is governor of The Central Bank, a banker.

If you missed it, http://www.rte.ie/player/#v=1092938

I’ve previously compared Prof Honahan to Lord Cardigan who led The Charge of the Light Brigade:

“Cardigan survived the battle. Although stories circulated afterwards that he was not actually present,[7] he led the charge from the front and, never looking back, did not see what was happening to the troops behind him. He reached the Russian guns, took part in the fight, and then returned alone up the valley without bothering to rally or even find out what had happened to the survivors.”

So the Professor was treated deferentially by Richard Crowley on Primetime. The questions put to Honahan were excellent. But Honahan’s answers were not challenged enough and so Honahan got a free platform to lecture the government and us all.

This morning Sean Whelan and Áine Lawlor took this to an elegaic level in viewing us Honahan’s views.

Basically, Honahan’s views are as follows:

1. burning bondholders is out;

2. renegotiating the IMF/EU deal is out apart from some vaguely nuanced shading to be wrought from careful negotiation;

3. negotiations to refactor the deal will be done for decades to come by future governments to adjust it to provide for growth in the Irish economy.

‘But we’ve just heard that tune sung by FF’s Micheál’, you say!

Yes, word for word. But Honahan here is directing his imprimaturs at the incomings. We don’t want them stepping out of line, do we? The pressure is on from Dukes, John Bruton, Fitzgerald,and others lying in the grass, to back the banks and screw citizens.

Should we listen to Honahan? Well, no!
Honahan is the guy who got Nama to look at Anglo’s loan book and gave us Spring 2010 a figure for Lenihan of €3 bn that by Sept 2010 had Lenihan about-face to a figure ahemmm, had risen to €34.5 bn of toxic debt exposure, according to the rating agencies. But if you listen to Alan Dukes, there could be another €10 – €15 bn of toxic debt on top of that, we’ll find out from March stress tests!

Honahan is the guy whose view was that the IMF/EU would not need to intervene in Ireland. That Ireland’s debt was manageable.

Wait for it, Honahan was Our Lord Cardigan, who led the negotiations that gave us our death rate of 5.8%. Honahan is the guy telling us the Russian guns will be fine tuned not to annihilate our economy, because if they do, they’ll have nothing to shoot at.

FF who believed this ridiculous guff have been rightly annihilated for believing it. If this government is serious about dealing with the banks, first in the firing line should be Honahan. With him in charge, we risk annihilation in coming negotiations.

We need a new Governor of the Central Bank of the calibre of Ólafur Ragnar Grímsson, President of Iceland, Bo Lundgrum of Sweden, or as DmcW writes http://www.davidmcwilliams.ie/2011/03/01/time-for-ireland-to-act-boldly:
“In 1990, the incoming National Party government of James Brendan Bolger, the son of immigrants from Gorey, faced exactly what Enda Kenny will face today: a banking crisis. The largest bank in New Zealand needed to be bailed out after Australian mortgage loans went bad.
Bolger injected capital into the bank only after forcing the bank and its bondholders and shareholders to take losses.”
If we follow Honahan, this country will face catastrophic default.

If we initiate a fair restructuring of our banking system on the basis of burning bondholders with debt for equity swap, we can both save bondholders and this country.

Otherwise, don’t bother to bring a paddle, we’re goin up sh.. creek.


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