Banana(s) Republic of Ireland!

April 3, 2011

Reading the papers this weekend it appears we all had an epiphany on April Fools Day last. We dwelt on the news that our negotiators far from negotiating a haircut of senior bondholders, acquiring a comprehensive package for dealing with our bank debt, perhaps a medium term guarantee for continuation of lending support for the banks, even the minimum haircut of the ridiculous interest on our bailout, in fact offered nothing to taxpayers.

We don’t have to read Joyce’s Dubliners to know that all epiphanies have a nostalgia for the past and possess some element of moving from the known to the unknown. Thus it was we said our goodbye to the cherished hope implicit in their election mandate, that citizens and taxpayers, led by the Labour Party clarion call of  ‘Labours Way, Not Frankfurt’s Way’, would have their rights vindicated and upheld against our zombie banks.  But we found out banks are bankSS and citizens rights by referenda or other means are not on their list of priorities, neither it would appear are the same priorities atop the list of our Government agenda.

““Secondly, if, in downsizing the banks, the deleveraging has to take place over too short a period, bank debt will become crystallised quickly and that’s a burden which is not necessary to bear in my view. So one of the things I said at all the meetings was we would require a longer deleveraging period so that we can restructure the banks.”

One of the most stringent measurements for successful righting any economic vessel capsized by its banking containers is speed. Another is the deleveraging of dangerous assets that can doom the viability of banks with years of uncertainty and loss of confidence.

Democracy goes out with the banks!

When Professor Honan says that ours maybe the most expensive and costly banking collapse in history, this in no small part due to the gombeen response of our banking guarantee that has brought this economy to its knees. It didn’t take a lot of arrogance and hubris for the king pins of our banking elite and Department of Finance, to guarantee economically fatal reassurance of financial markets, that our banks were ‘safe’ and guaranteed by the sovereign.

No consultation or negotiation was entered into with our ‘european partners’.

In hindsight following the collapse and wind down of other banks across Europe, special help could have been available to guard against the moral hazard dangers of facing Irish citizens with the bill.

We used the disastrous guarantee to deadly effect. So far it has brought us to the EU/IMF bailout and ECB vassal state status. There is no guarantee the current cost of saving Irish banks at its fifth attempt at €70 bn will fill the black hole of the Irish banks.

There again, the cost of saving the banks has not  similarly ‘stress tested’  Irish taxpayers. But we do know GNP and GDP are needling towards deflationary values that signal default.

Even the stress tests on the banks, never mind our ability to repay €3/€4 bn Vichy reparations, all predicate on growing away our default. Instead, we are dying this economy into a state of default.

Apparently our hapless puppet negotiators made insistence upon a slowdown of deleveraging, allegedly using the old canard that to deleverage would mean liquification of losses. Its the Nama point of view that firesales would lead to higher loss for the state, this against the rather  hopeless growth forecasts that a rebubble ignition would raise all boats. The rotten apples logic of this,  has already proved true with a negative growth outlook on the horizon. This is in  no small part spurred on by enormous personal debt and mortgage default liabilities, that were never there even in the austere eighties.

On top of this humiliation, Irish citizens are still on a daily basis beset with urges to optimism from those who’ve wrecked the economy, Polyanna economists without a shred of evidence in support of their optimism and confidence except the ephemeral mirage of a couple of new jobs here or there, lecturing citizens on ‘return to growth’ and ‘fixing the economy’ with catchall phrases that include the need for  ‘confidence’, ‘recovery’. This must indeed replicate the response of some travellers on The Titanic who denied  imminent sinking of their ship.

We should have done as the Nordic and Swedish economies did, get the toxic assets off the books, write down losses. Our troubled history of dealing with the crisis has been rather to hide losses that unknown to us have been creeping upward since the beginning of our meltdown. Our ‘European partners’ must smile at our negotiation stance against fast deleveraging.

But all this is part of our ‘ slow boat to China ‘ response to our crisis. Speaking of which one is reminded of analogies between China’s support of certain African Banana republics and our own relationship with the ECB in delivering a response to our meltdown.

Some argue China has ignored the issue of human/political rights in Africa, prepared to deal with  a privileged political and financial elite who’ve corruptly siphoned financial support away from African citizens. No different really to the management of the Irish banking meltdown with the ECB in the role of China; developers/financial service industry/banking industry in the role of those ‘on the take’ in a typical African scenario.

Now that grab for bailout has been grabbed by those who got us into the mess, we should now also worry the other lynch pins of democracy,  our independent judiciary, and our media as they have become targets – democratic threat to socialisation of the banks and financial sector?

Financial fascism led it seems by the ECB and our Government threatens the very foundation of our democracy!

But there may be upsides, now that Chopra & Co are preparing the budget for the Department of Finance, maybe we can save money by zero downsizing Dail Eireann and Department of Finance  and having Ireland governed along the lines of a Roman prefecture by the EU/IMF/ECB 🙂

Back to Epiphany, those of us on the side of free capitalism and democracy look on aghast that any renegotiation of our bailout will be siphoned away from taxpayers into Donkeyote  disastrous Nama or unfettered support for foreign bondholders feeding on Ireland’s carcase, wiederbelebung auf wiedersehen!

As government fails in its responsibility to defend takeover of citizens rights and democracy by the banks, as government disappears down the rabbit hole with Dorothy in search of the Wizard of Oz, whereto next for citizens?

So far government policy, continued anew with our change of government, has brought in the EU/IMF, next up is default and meltdown!

Government of the banks for the banks and by the banks…..!

I believe we are soon to have visitors,


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