Time Shall Unfold What Plaited Cunning Hides

March 3, 2013

English: Credit Default Swap default

English: Credit Default Swap default (Photo credit: Wikipedia)

Part 1

One would be forgiven for believing you had woken up in a satellite state of USSR last week.

On the one hand, news filled the air of our very own Ghulag, the Magdelene Laundries, extension of abuse allegations from children, now a new cohort of adult, single, females out-of-wedlock the main controversy.

But I digress.

This followed the previous week’s announcement of the laundering of Irish Promissory note repayments into commercial and legally enforceable bonds. There has been some doubt as to the legality of promissory note repayments from both the ECB and the Irish government’s point of view.

If we had politicians of the mettle of Iceland’s Grimsson, we would have refused to pay these notes. In capitalism, Anglo would have been allowed to fall.

In totalitarian EMU, this totalitarianism, enforced by international banking cartels, set the ECB on its course, with eagerly compliant and obedient Irish politicians, challenged by lack of knowledge of economic matters, with an Irish Central Bank, operated in conjunction with senior officials in our Dept of Finance, whose involvement regulatory and otherwise in the demise of Anglo has been shrouded in secrecy by our lack of a banking inquiry, set out to protect French and German bondholders, at taxpayers expense.

Blindfolded or blindfooled Irish politicians set out to take one for the team! Embarrassing but true.

Here is a full list of the bondholders:


May I digress again, we had surprise news of Pope Benedict sudden standing down and retirement. It was a worthy global news story but in Ireland it was elevated to apocalyptic proportions with it appeared most of the staff of RTE decamping to St Peter’s Square to give moment by moment accounts of who the cobbler was who made Pope Benedict’s red shoes.

On radio and television there were debates ironically with two factions, one arguing RTE was in the main giving negative publicity to Catholic affairs; the other, well saturation coverage spoke volumes. At least we were protected from weeping crowds giving Kim Jong 11 of North Korea the status of a demigod, but it was too close for comfort.

IT was difficult to remind oneself The Pope’s office was not unburdened by allegations of sheltering those in authority who otherwise should have been made to hang their heads in public shameful resignations in respect of cover ups they were responsible for.


As recently as last January there has been the cancellation of abuse enquiries into abuse allegations in Germany. Arguably the investigations were moving into criticism of the hierarchy.

On the other hand, it turns out there have been fewer bankers asked to give account of their deeds than bishops in Ireland. There has been  a  transfer of power from church and state, to shadow banking in Ireland and in Europe now running our affairs through puppet politicians, no Vichy government surprise there.

Ireland’s left has moved as far to left it now has turned the corner and morphed into the right.

Meanwhile An Taoiseach Enda Kenny, of whom we have learned following Obama’s visit to Ireland, is a student admirer of Obama’s speech making – one was reminded of the visibly upset President Obama on reacting to the student shootings in Newtown as he wiped a tear from his eye – when Enda Kenny at the end of his announcement of apology to the Magdelene’s, victims of Ireland’s ghulag, shared a similar emotional moment with us in the Dail.

However, the authenticity of the moment was questioned in the lack of detail on a compensation scheme that is yet to be decided. Lurking in the background was Professor Honahan’s enjoining of the banks to get on with it, stating he was tearing his hair out at lack of progress, coupled with recent announcements of repossession orders of circa 1000/yr from one bank as they intend to get tough with those on mortgage arrears. This story has all the hallmarks for a new front in the war between the banks and Irish taxpayers.

This was further reinforced in the indifferent removal of mobility allowances for qualified recipients on the basis of their so-called illegality. This was a cold and downright insulting jack boot broken promise that disability allowances of this kind would not be touched by An Taoiseach, not ameliorated by statement of another scheme to be decided within 4 months to ring-fence the funding of the current mobility scheme?

No one believes recipients of the current scheme will not be at a loss or that this promise will not be broken to people with disabilities.

No more greater comparison exists for Ireland’s degeneration into a cloned dopelganger mirror image of a former soviet satellite state of the USSR exist than its  lack of a proper banking inquiry.

Part 11

The transformation of Promissory Notes into bonds however much short-term gain is measured against long-time cost, means Ireland has abandoned a growth path based on debt burden sharing, write-down, in favour of a long-term lock down into puppet economics, where the future of this country has been handed over to the IMF, ECB and bondholders by politicians scant in their knowledge of anything outside the comfort zone of preservation of power and blind obedience.

Austerity taxes, property and otherwise, hidden charges, reduced expenditure on public services, growing emigration, falling employment levels make  compelling and growing evidence for a comparison between satellite EMU states and the EMU inner core in terms of similar comparisons in the former USSR between Russia and its previous satellite states. The euro is becoming the new rouble.

Jagjit S. Chadha, professor of economics at University of Kent, observing the effects of bailouts in the EMU and its growing economic difficulties over the past number of years, has noticed a deteriorating credit risk in terms of CDS for the eurozone.

“Let us, for example, consider credit default swaps on sovereign debt.  These instruments are simply instrument designed to make a risky government bond into a risk-free government bond (you can buy them on corporates but let’s concentrate on govvies).  The holder of a risky bond buys a hedge from someone who wishes to sell insurance.  The seller of the credit default swap (CDS) collects the premia from the owner of the risky bond and insures against default by promising to pay the par value of the bond in the event of a default, or “credit event” by the original debt issuer.”

“we can observe a bifurcation of sorts between the change in the spread between 2010 and today for the EMU countries and non-EMU countries.  The latter have been relatively flat, implying the financial market price have not priced in especially higher rates of sovereign risk, even though sustained economic growth has not returned. But for the four Euro Area economies Italy, France, Germany and Spain, CDS spreads seemed to have, at least, tripled.  Whether this is contagion or liquidity or a true measure of heightened Euro Area risk, I leave for another time.  But the price of a hedge does seem to say something clear-cut about the continuing problems of the Euro Area and that much work remains to be done.”

According to the recent political success of  Beppe Grillo from Italy’s Five Star Movement Italians are listening to his view of Italy’s economic and political rubble filled with corrupt politicians and lazy bureaucrats and both surprises and changes are coming. In Ireland, recent polls show the electorate are not listening to the chattering nonsense of austerity working, enslavement to a failed banking system, with its  tendrils oozing into every tax opening in Ireland with its government endorsed mandate to suck the life out of public services and economic prosperity and sovereignty.

In such a volatile environment on the political and economic level, bankers will not have their own way. There are some surprises ahead. Catch King Lear at the Abbey, if you can, perhaps those who’ve so graciously handed away the reins of this state at so little cost to themselves, at so great cost to us, may ponder on “Time shall unfold what plaited cunning hides.”
– William ShakespeareKing Lear, 1.1.302

While Ireland’s Minister for Jobs, Enterprise and Innovation, Richard Bruton  TD was appearing at yet another small announcement of a few extra jobs with scripted cliches on Ireland’s economic turnaround, Moody’s has downgraded UK’s AAA rating. This could effect Ireland’s exporters to the tune of a loss up to €1 bn.

In the currency wars between sterling, euro, dollar, Japanese yen, Chinese yuan, the race to debase continues piling more debt onto already troubled currencies.

Some politicians make bad actors.

Part 111 Postscript

Today 05/03/2013 propaganda fills the air from newspapers, RTE headed by cries of massive savings for Ireland, repayment schedule for Ireland’s loans to save billions for Ireland.

Richard Bruton was interviewed on Morning Ireland ( surely missing an E and a U there, but work that out yourself ), according to Richard Bruton, EU Finance ministers are on the point of agreeing a new deal on Ireland’s 2010 bailout costing taxpayers in the region of €40 bn ( bailout is not my word ).

The difficulty is in the coming years various tranches of these bailout loans are scheduled for payback over the next 3 – 10 yrs at a time when Ireland wishes to return to the markets and raise its own loans. For a country already economically crippled and unable to payback loans its difficult to see the markets take other than a negative view of this situation and proceed to punish Ireland accordingly threatening economic recovery.

There is an added complication in the fact that a large proportion of the original Irish bailout came from the EFSF supported by a minority of EMU states and the current ESM supported by all 27 members so political consideration of support for any deal done to favour Ireland is part of the agenda. Already signals from the ECB re its role in bailout negotiations would appear to signal cold feet in the matter.

But however much everyone is dragged to the table news is of an impending deal to be finalised before April. April 1 would be an appropriate date for finalisation of the deal!

According to Richard Bruton and later confirmed by Michael Noonan Min of Finance and Tony Connolly RTE European Correspondent, the kernel of the deal will involve an extension of maturities across a range of options, the nub being a deferral of maturity dates in the region of 10 – 15 yrs.

This would allow Ireland to return to the markets and raise 10 – 15yr bonds from the markets without the concern in those timeframes of Ireland scuttled by loans it cannot pay back. Don’t worry, Bruton and Noonan will be out of office by the time those maturity dates come around and your children are asked to pay up on the €40 bn.

Meanwhile propaganda headline abound “A Boost For Ireland…”, the reality is you need to replace to 2 zeros, Bruton and Noonan, in ‘Boost’ with ‘u’ meaning ‘bust’.

The reality is any return to the markets by Ireland with its current debt profile that has no element of debt write-down will be on a pretend basis. This is no longer a stand alone economy.

Any new bonds fleshing out the above deal as replacements for the original €40 bn bailout in 2010 will be paid for out of ESM funds at a fixed interest rate set by the ECB/ESM. The interest rate will be more favorable to anything Ireland could raise on its own in the markets. All loans are fully repayable with extended maturity dates

Ireland should give up the pretense of a return to the markets. Ireland is now cocooned by less than mediocre politicians into a Gordian knot of debt it will not be allowed to escape from. No Alexander The Great’s such as Iceland’s Grimmson will unravel it.

The EMU is turning into the new USSR funding its satellite states in a similar way to Russia during the Cold War.

The financial world of banking in particular the Central Bank of the EMU, the ECB, has almost extinguished democracy in Ireland. It is working on its extinction.








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