Vote NO!
September 30, 2013
Enda B o o!
The propaganda machine to abolish the Seanad is in full swing. Sure, The Seanad is in need of reform, but, at the moment, we need every institution with democratic powers, to defend democracy in the state.
Now is not for us to allow Pinocchio, Ceaucescu like dictatorial leadership in this state, instead of reforming the state, and making it more democratic, to replace the democratic pillar of The Seanad, with the rule of the “pillar banks”.
Full guide to The Seanad and coming referendum from http://referendum2013.ie/
What does the Seanad do?
English: Arms of Ireland depicted as a banner and in a manner like during the Kingdom of Ireland period. Based on File:Arms of Ireland (Historical).svg (Photo credit: Wikipedia)
” Making laws
At present, the Oireachtas (the National Parliament of Ireland) consists of the President, the Dáil and the Seanad. The Dáil and Seanad are the Houses of the Oireachtas. The Oireachtas makes the laws of the country.
Proposed laws are called Bills. In order to become law, a Bill must be passed both by the Dáil and by the Seanad and then signed by the President. The Bill then becomes an Act.
The process of making general laws starts when a Bill is presented in either the Dáil or the Seanad. Members of each House may propose changes to Bills. The Seanad has the power to delay a Bill by up to 90 days but does not have the power to prevent it becoming an Act or to change it unless the Dáil agrees. ”
Its powers are severely curtailed and limited. It does however have the power to propose and examine Bills that may or may not be passed into law.
Abolishing the Seanad will do away with article 27 of the Irish Constitution http://www.constitution.org/cons/ireland/constitution_ireland-en.pdf
The Seanad has the power to voice the will of the people in proposing a referendum on matters it considers relevant to the people:
“Reference of Bills to the People
Article 27
This Article applies to any Bill, other than a Bill expressed to be a
Bill containing a proposal for the amendment of this Constitution,
which shall have been deemed, by virtue of Article 23 hereof, to
have been passed by both Houses of the Oireachtas.
1. A majority of the members of Seanad Éireann and not less
than one-third of the members of Dáil Éireann may by a joint
petition addressed to the President by them under this Article
request the President to decline to sign and promulgate as a
law any Bill to which this article applies on the ground that the
Bill contains a proposal of such national importance that the
will of the people thereon ought to be ascertained. ”
”
If this referendum is passed:
- This possibility of the reference of Bills to the people by the President will be removed from the Constitution. “
Taken from the referendum website http://referendum2013.ie/
“Approval of certain European Union (EU) proposals
At present, Ireland may adopt and implement certain EU laws and decisions – for example, in the areas of justice, free movement of people and certain amendments to EU treaties – only if this is approved in advance by both the Dáil and the Seanad.
If this referendum is passed:
- Only the approval of the Dáil will be required for the adoption of such EU laws and decisions.”
The website makes ominous and vague reference to the ambiguous “certain amendments to EU treaties”
So, there is a helpline referendum commission 1890270970 I used to clarify the lack of information there: I rang the number at 10:06 on 30/09/2013. The number did not answer but I got through to another number 6395695 and was helpfully told to forward an email with the Q to refcom@refcom.gov.ie which I’ve done, I’ll post here any results.
Further to the above, I’ve now received the clarification from Referendum Commission Secretariat:
It turns out the Seanad has a rather strong role as explained in the following link. It provides a forum for debate deliberation and consideration when called upton to act in the following areas:
http://referendum2013.ie/the-seanad-background-information/#eu
See above link, “The Seanad’s role in relation to European Union (EU) laws and decisions” in determining the power of The European Council to amend or make changes to governing Treaties.
In the area of Enhanced Co-operation
“If Ireland wants to take part in this procedure, the prior approval of each of the Dáil and the Seanad is required.”
There are particular decisions under the treaties where Ireland may opt in or out. A particular instance example of this would be an enhanced role for member states, if this were to happen, voted upon by member states in regards to Syria for example.
The Seanad should have a role in the formulation of such policy.
Areas where Ireland may opt in or opt out are of interest and covered in the above link.
“The EU Treaties provide that Ireland (and the UK) is not obliged to take part in, or be bound by, decisions in what is known as the “Area of Freedom, Security and Justice”. This covers issues such as asylum, immigration, border controls, judicial co-operation and police co-operation.”
Article 29.4.7° and Article 29.4.8°
Voting to abolish the Seanad is a vote to throw out the baby with the bath water.
Dail reform and Seanad reform amounts to a demolition of both in this growing Pinnochio-like state of ours.
They want to annex the Seanad save €20m…But you could do that by cutting Dail salaries in half to bring them in line with those in Norway…
Banking Inquiry
Propaganda is in full swing at the moment trying to demolish and fumble the proposed banking inquiry: WB Yeats, Sept 1913
“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?”
What the heck, its the centenary anniversary of the date, so full link to the complete poem here: http://www.poemhunter.com/poem/september-1913/
According to Nyberg and Honahan we already have in their reports all the information we need.
They went and spoke to a bunch of banking leaders who spun them a tale in confidence out of which Nyberg and Honahan spun a summary tale telling us nothing we did not already know before. We were sold a pup.
We havn’t had nor are likely to get a real inquiry.
We are likely to get a future burial of the truth.
What’s a real inquiry?
There should be 2 parts to it, Part One up to and including THE GUARANTEE; Part Two up to the present day inquiring into how the terms of our bailout were competently or incompetently dealt with.
Particular emphasis should be given on the role of Prof Honahan who seemed to act independently of the state in respect of the bailout, at one point making a call that should have been that of the Irish Minister for Finance, the late Brian Lenihan TD.
Subsequent disastrous and odious debt interest terms negotiated by Honahan ameliorated only out of embarrassment with better deals offered to Spain and Portugal, should also be investigated.
There have been other disastrous failures fronted by Enda Kenny and Michael Noonan who’ve left signatures on a failure to renegotiate bank debt.
This has been most disastrous in their failure to achieve burden sharing/debt or a deal based on debt for equity swaps for our banks.
They have failed to have our Promissory note terms rescinded and abolished. They have led us into a toxic debt profile that gets worse by the day.
The fabrication of lies and concealment of information around bank negotiations has been turned into an industry by the present government. Lies and innuendo surround our banks, one of the larger deceptions being they are fully capitalised.
The black hole of mortgage debt loss and the crisis of personal debt liabilities have been covered up for now but they will emerge in oncoming stress tests.
According to Michael Noonan “
Minister for Finance Michael Noonan has said the next round of capital stress tests of Irish banks would take place in the first half of next year and not before our EU-IMF bailout programme concludes at the end of 2013, as was originally planned.
Mr Noonan said yesterday he does not expect that these tests will result in the banks requiring extra capital to bolster their balance sheets and to meet their regulatory requirements ”
But Noonan is used to getting things wrong, here he categorically states we will not be needing a bailout http://www.rte.ie/news/2011/0530/301718-economy/
It turns out he’s wrong again and here he’s applying for a precautionary bailout of €10bn
http://www.finfacts.ie/irishfinancenews/article_1026513.shtml
So, folks, remember, when our EU-IMF bailout programme concludes at the end of 2013, that refers only to the current programme, they’ve another €10bn round of lending to stuff Ireland with ready in the wings.
Only when rubbish bailout becomes debt for equity swaps in our banks, burden sharing, debt writedown, will Ireland stop being led over the fiscal cliff of financial disaster, by the likes of Noonan.
Kenny’s and Noonan’s swan song for Ireland has a twin axis of constricting the economy through odious debt and a dismantling of Irish public services such as the recent announcement of ‘reform’ of the Junior Cert in Irish Education with schools and teachers mandated to design their own exams, correct them, issue their own certificates.
The danger of a raid on deposits through bail in of the Irish Pillar banks is a clear and present danger.
Methodology
Our banking inquiry needs to abandon the oral history approach with individuals being questioned and responding according to their selective memory of what happened.
Instead we need legislation to follow the money.
Focus on the Dirty Dozen of the largest loans handed out to developers in each of the banks and investigate how the money was obtained, who sanctioned what, what documentation and oversight was given to the approval. Who got what bonuses on foot of these loans, qualifications of the management team?
The bonus culture should receive special attention.
Particular focus on political connections?
The above approach will reveal how the banks were run into the ground.
It should reveal how our banking system became infected by political favoritism and corruption and mindless greed mixed with incompetence, but the facts/evidence need to be brought to the surface.
Focus on the GUARANTEE should be given, who fed into the decision and on what basis was it made?
Nyberg of the Nyberg Report http://www.finance.gov.ie/viewdoc.asp?DocID=6799
End
The People’s Bank
September 24, 2013
Dr Ellen Brown will shortly visit Ireland to speak at events organised through Irish Public Forum on banking/finance
http://www.republicirelandbank.com
http://ellenbrown.com/
http://www.alternet.org/economy/perfect-alternative-wall-street-banks
“Protect Your Assets in the People’s Bank”
Springfield Hotel
Leixlip Road
Lucan
Sat Oct 12
11am – 4pm
“Protect Your Assets in the People’s Bank”
Imperial Hotel
South Mall
Cork City
14 Oct
7-9pm
“Protect Your Assets in the People’s Bank”
Hodson Bay Hotel
Athlone
Co. Westmeath
15 Oct 7-9pm
A wider role for such a bank is envisioned than that provided by An Post in Ireland http://www.anpost.ie/anpost/maincontent/personal+customers/money+matters/savings+and+investments/
An Post is run by the National Treasury Management Agency (NTMA) .
NTMA is also responsible for NAMA’s leveraged buyout of Irish distressed property assets acquired from Irish banks to the tune of circa €80bn http://www.cpaireland.ie/docs/default-source/media-and-publications/accountancy-plus/finance-management/nama—an-overview-(september).pdf?sfvrsn=0
http://www.finance.gov.ie/viewdoc.asp?DocID=808#ch2
“2.15 There are also two savings banks in Ireland. The Post Office Savings Bank is owned by the Government and is a deposit-taking institution whose deposits are all loaned to the Government. The other is a trustee savings bank (TSB Bank) and is mainly concerned with retail lending and money transmission.”
“2.17 In addition to the above, there are over 400 credit unions in Ireland, which are co-operatively owned entities15. They report to the Registrar of Friendly Societies. They have traditionally provided savings and loan facilities at local level. The Credit Union Act, 1997, expanded the role of credit unions by permitting them to lend larger amounts for longer periods.”
“2.19 The two major Irish banks, AIB Bank and Bank of Ireland, are both publicly quoted companies and have raised the bulk of their capital through the Irish Stock Exchange. In each case, ownership is widely diversified, with over 100,000 shareholders, most of whom are private individuals with relatively small holdings.16 In the case of AIB Bank, 41 per cent of shareholders own fewer than 1,000 shares each, while in the case of Bank of Ireland this figure is 54 per cent.17 These small shareholders, however, own just 1 per cent of the total shares. Like similar publicly quoted companies, the bulk of shares in the two largest retail banks are held by institutional investors, including pension funds and assurance companies – 78 per cent of the shares in Bank of Ireland and 65 per cent of the shares in AIB Bank are held in share holdings of more than 100,000 shares.18 An increased portion of the shares in AIB Bank and Bank of Ireland are now owned abroad. At end-1999, a majority of the shares (by value) in AIB Bank were owned abroad.19”
“There remains the possibility that an Irish bank could be purchased as part of a diversification strategy, based on seeking exposure to the Irish economy or access to the EU. The profitability and diversification of the two main banks outside Ireland would influence developments in relation to this option.”
Clearly the Irish government would like the Irish banks to be brought to the point where private stakeholders would like to invest and divest them of the government/troika role of lender of last resort.
But there are obstacles such as a fear of a bail in where depositors and shareholders may be burnt if the black hole in the commercial property and private mortgage/personal debt begins to exert its pull. This could happen in the event of a slowdown in growth in Europe which is currently ongoing, a flatlining of growth in Ireland beneath the 3% propaganda touted by supporters of bailout or a SURPRISE such as a German decision to divest itself of the euro.
Irish people remain minority stakeholders in these banks( see previous blog). Private investors have another agenda than the support of democratic institutions/public services and the state. Pillar ‘Irish’ banks is a misnomer of epic proportions given the history of these banks.
Irish people would prefer not to be at the mercy of predatory lenders or private investors with an agenda to loot the citizenship through austerity or other bail in means. Therefore the safety of deposits and return on investment in the Irish economy is of prime concern.
However the fundamentals of the Irish economy have not changed since the publication of this article by Morgan Kelly in 2010 http://www.finfacts.ie/irishfinancenews/article_1019701.shtml
Irish debt levels are currently soaring higher than Greece’s as % of GNP in spite of Irish efforts to bring its deficit in line with troika demands.
Until the black hole at the heart of the ‘pillar Irish banks’ is filled ‘return to market’ flag waving remains absurd. Propaganda against the junk bond status of Ireland in Ireland is endemic. However politicians in Europe try to explain to Ireland there will not be legacy bailout of the Irish banks through the ESM or any other means, Irish politicians fail to accept it. ‘Up for discussion’ is touted as certainty Mario Draghi will ride to the rescue of the Irish economy and bail it out from European funds.
What is likely is some exponential reworking of Irish debt such as it becomes a logarithmic replacement definition of the word EURO with E U O. You know the definition of the Exponential term E, don’t you? No? Here goes….you borrow amount X €10 and pay interest on it over the term of the loan. But you find you have not enough to get by after a while. So you borrow amount Y €8 but now you are paying interest on X and Y, so you after a shorter while need to borrow amount C €6 but now you are paying interest on A, B, C…You see where we are going with this.
If you are country with a lender willing to keep lending you the A,B,C under the above scenario its clear Moody’s would give you Stable Junk status.
Insofar as Enda Kenny has politically failed to give a result on Ireland’s debt through successful renegotiation of Ireland’s promissory note repayment obligations, failure to discount interest rates on Irish debt where none is due, failure to achieve burden sharing and debt write-down, failure to achieve settlement write-down of mortgage debt in the face of the looming bank stress tests, failure to lift the Irish economy out from under its burden of debt, Kenny’s legacy will be one of Ceaucescu proportions.
The same smoke and mirrors gang of political opportunists loving their jobs in Europe and scalphunters coining it from their lucrative jobs in Irish financial affairs have scorned Moody’s latest definition of Irish bonds as having ‘stable’ junk status.
Let us hope any future US Postal Bank competing with Wall Street will not be burdened with its assets raided by bail in forced upon it through machiavellian and draconian enforcement of distressed property disposal masquerading as ‘bailout’.
Ireland is seeking a safe resolution of its banking crisis in a world teetering on the brink of global financial crisis.
TBTF banks such as JP Morgan has an exposure to derivatives to tune of approx $70 trillion approx size of the global economy of the world today, total derivative exposure of the TBTF banks is approx $21 trillion.
No surprise “Wall Street banks are the largest borrowers from the Federal Home Loan Banks, with JPMorgan way out in front with borrowings of $61.840 billion.” Anyone auditing how much of that is handed out in student loans or to home owners or into the real economy. It will be used to invest in more derivative gambling….
The Black economy of derivatives and shadow banking sucks FED bailouts, sucks real economy bailouts through not lending into the real economy, sucks interest on bailout loans to suckered bailout economies, all into the unregulated and growing black hole of
shadow banking.
TBTF banks need to be broken up, the derivative market sanitised/regulated, interesting times ahead as bailouts fail…
http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html
We have a post office savings bank managed by the NTMA who issue government bonds. In a world where the real economy is being replaced by the new virtual casino economy of financial markets operating exclusively in the shadow banking derivative markets, Ireland should look to safer banking within the public banking model of The Bank of North Dakota eg its student loan model here:
http://mystudentloanonline.nd.gov
End
Circling Sharks !
September 15, 2013
Is it too much to ask of Dail reform that ministers be required to sign a pledge not to take any position in the financial services or banking industry upon leaving the Dail to prevent a dual mandate situation?
Ministers may go easy on banking and the financial industry if they hope to follow the path of so-called ex politicians such as eg Dick Spring, John Bruton, Peter Sutherland or Alan Dukes.
Politicians serving a dual mandate of democracy and the financial services industry do not serve democracy.
http://en.wikipedia.org/wiki/Savings_bank_(Spain)
“Collapse of the cajas[edit source | editbeta]
Central Bank of Ireland (Photo credit: Wikipedia)
In the aftermath of the global financial crisis, the Spanish real estate market collapsed, taking Spain into its very own financial crisis.[1] Out of the 45 cajas in existence at the start of the crisis in 2007, only two survived in their initial form; the rest were either taken over by other banks or by the government or forced to merge and taken over by the government, wiping out existing equity holders.[2] “
There is a black hole in Irish banking composed of personal, business and mortgage debt that has yet to be filled. New regulatory rules and pressure from Europe want this resolved and pressure is mounting to do this quickly.
This problem has been shoved under the carpet for quite some time now. http://machholz.files.wordpress.com/2010/04/conclusions.pdf
“In the aftermath of this bubble, the Irish banking system faces three inter-related problems. The first is that it has made large losses on loans to property developers. The second is that it has large wholesale liabilities to international bond holders and, increasingly, to the European Central Bank. The final problem is that it faces likely further large losses on mortgages and business loans.”
A lot has happened between Kelly writing those words in 2009 suffice it to say we are under pressure from our lenders at the point of taking the hit from the hidden stockpile of ” further large losses on mortgages and business loans”
Instead of a banking inquiry Prison we have the Central Bank’s PRISM that is tightening the ligature around the neck of the Irish economy. There are a number of economic forces that indicate an endgame is in sight.
According to Honahan
“Governor Patrick Honohan said the Central Bank is examining how banks measure the riskiness of their assets when deciding how much capital they need to hold.
“The risk weighting of assets is a matter which we at the Central Bank of Ireland are looking at in the context of the ongoing SSM balance sheet assessments and the EBA stress tests scheduled for 2014,” Honohan says in an article prepared for a conference in Vilnius.”
EBA stress testing here: http://www.eba.europa.eu/risk-analysis-and-data/eu-wide-stress-testing
The Irish ‘pillar bank’ titanics, their water ballast tanks holed beneath the waterline, are grasping at straws hoping an upturn in Europe or the global economy will save the inevitable day.
Their partner, the ECB preying mantis could force the annexation of the Irish credit union sector in a foul regulatory swoop to guarantee all credit union deposits within their grasp.
The prospect of a Cyprus like swoop on depositors in a Cyprus type showdown forcing losses on the money too terrified to spend in a 40% scalping of Irish deposits should not be underestimated. Irish depositors money in the so-called pillar banks is not safe.
Basil 111 monitoring reports here: http://www.eba.europa.eu/risk-analysis-and-data/quantitative-impact-study/basel-iii-monitoring-exercise Basil 111 is forcing a stress testing on Irish banks that under current conditions Irish banks should dread.
Irish economic polyanna shape shifters forecasting more employment and an improved local and global economy are having cold water thrown on them even by the Polyanna based forecasting model of the OECD.
“The OECD believes Ireland’s economy will remain flat in 2013 but GDP will rise 1.9 per cent in 2014, below government forecasts, and called for more to be done to get the economy back to “full health”.
In a report on the Irish economy released today, the Paris-based Organisation for Economic Co-operation and Development forecasts the economy will fall short of the government’s growth forecast of 1.3 per cent this year and 2.4 per cent next year, recording no growth before expanding slightly in 2014.”
“The Irish government, including Gilmore, previously agreed to abide by a commitment to have a further fiscal adjustment of €3.1 billion in 2014 and €2 billion in 2015 in order to get borrowing to three per cent of GDP by the end of 2015.”
So another fiscal adjustment of total of €5bn against a backdrop of a slowing global economy and further easing of QE in the US would have us believe minus is now plus. PIGS don’t fly.
But trouble for the Irish economy doesn’t end there with black holes in banks and stress testing with new regulatory requirements, another income source in the financial sector where Ireland has operated as a tax haven, is now under scrutiny.
” The EU has proposed a broad-based tax on stocks, bonds, derivatives and other trades that could be collected worldwide by France, Germany and nine other EU nations that have so far signed up. The plan would charge a 0.1 per cent rate for stock and bond trades and 0.01 per cent for derivatives transactions, with some exemptions for primary-market sales and trades with the ECB….
The feud centers on proposals for worldwide tax collection on trades involving a bank or financial security based in one of the participating nations. The council’s September 6 legal opinion said the EU can’t justify such an aggressive approach just to keep traders from moving outside the zone of participating nations.”
The IFSC(Irish Financial Services Centre) already experiencing a rash of banks not renewing their licenses to trade there, could be constricted more!
Meanwhile globally the rush is on to stop the runaway train that led to the deregulated train of shadow banking going off the rails.
But globally the €700 trillion monster market in derivatives in the shadow banking sector instead of being regulated and disinfected with plasters such as
” http://en.wikipedia.org/wiki/Volcker_Rule
“The Volcker Rule is a specific section of the Dodd–Frank Wall Street Reform and Consumer Protection Act originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers”
…is now experiencing the shadow banking market dive beneath the radar of even the TBTF and the Central Banks further destroying the reliability of fiat currency
Banks share of shadow banking declining http://www.ft.com/intl/cms/s/0/b98ec11c-1b07-11e3-a605-00144feab7de.html?siteedition=intl#axzz2efcnkU4l
Even TBTF Banks are under attack, with shadow banks, such as hedge funds and other non-bank financial institutions now taking more than 50 per cent of both interest rates and FX trading for the first time, according to data by the Bank for International Settlements.”
Not good news for the Irish IFSC minnows swimming in shark infested waters.
More trouble for the Irish economy is current investigation by EU of Ireland’s tax haven status with EU investigating tax rules ..Ireland as tax haven ..Double Dutch sandwich facility under Irish tax laws of tax dodging for multinationals…subject of earlier blogs here.
A way out:
The way forward from this morass should include preparation by Ireland for a new local emergency currency, a parallel bitcoin currency that could exist independently of any bank.
http://en.wikipedia.org/wiki/Bitcoin
The ‘pillar banks’ in the event of the removal of Ireland from the EMU through an IMF and International Bank of Settlements resolution of its banking debt, could adopt the model Public banking with real reserves that include debt write down.
The credit union movement is under imminent threat from the Irish Central Bank.
NB
One wonders if the new fitness and probity regulations imposed on credit unions will not see some credit unions sink and merge with other credit unions.
The ‘pillar banks’ have their eye on the capital base of some large credit unions with a view to improving the capital base of the major banks in a merry go round similar to what has been seen seen in the local, community and family based, caja banks in Spain.
https://www.centralbank.ie/regulation/industry-sectors/credit-unions/Pages/default.aspx
Unfortunately politicians are not spear heading the way ahead, leading lemmings over the cliff is more to their liking.
How about testing yourself by guessing how many of the current Labour party ministers following failure at the next election will instead get jobs in banking or the financial industry.
That would be in the Labour tradition of eg Dick Spring who landed the plum job as a director of Allied Irish Bank and lives comfortably from annual pension repayments…Perhaps a new rule for politicians to avoid the Sutherland and John Bruton legacy of Irish political equivocation with the financial sector, would be to ban Irish politicians from lucrative payoffs in the financial after politics, are their pensions not expensive enough?
But to get your mind into a better zone to understand the emerging end game for Ireland’s banks, an exercise would be to reread Morgan Kelly here or reread Michael Lewis links below.
http://www.irishtimes.com/debate/ireland-s-future-depends-on-breaking-free-from-bailout-1.565236
http://www.finfacts.ie/biz10/Michael-Lewis-on-ireland.pdf
http://www.politics.ie/forum/economy/142131-i-have-no-solutions-morgan-kelly-times.html
(See pic of titanic below)Slight difference being those leaving the Titanic and the 1000 per week now leaving Ireland: they are not the old and weak and ladies before men but include some of Ireland’s best graduates from its leading universities with those most able to make it elsewhere.
It would be remiss of anyone looking at the circling shark portents and the failure of Fine Gael and Labour to achieve a satisfactory result on burden sharing our banking debt with the ECB preying mantis, to look for other safety net guardians of Irish interest.
Alternative currency model such as the puntnua should be looked at. Another model for our banking system as represented in the public banking model of The Bank of North Dalota should be looked at. A parallel currency model that could be used in an emergency situation should be looked at.
Ellen Brown who is visiting Ireland shortly, more details shortly, is a leading light in the analysis of Public Banking as a new banking model.
In her latest blog http://webofdebt.wordpress.com/2013/09/11/public-banking-for-wales-ireland-and-scotland-promise-and-possibilities/ she highlights the work of Dr Ian Jenkins who has written 2 articles on the question of such a public banking model for Wales.
Ireland would do well to explore the public bank model proposed for Scotland in this article by Ellen Brown:
http://www.webofdebt.com/articles/scotland.php
http://webofdebt.wordpress.com/
“True economic sovereignty means having control over the national currency, credit and debt….”
In Ireland we have still to fully rue the day we joined the failed experiment of the EMU under the euro.
In a commonwealth alliance with England/Scotland/Wales and a single 32 county economic area, we may have had some clout to promote the aspirations of independent self determination.
Instead of which we are to endure relegation to the 1/27 demoted membership of the EMU circled by sharks without the kindness of strangers; Irish money that remains is at high risk.
According to Sunday Independent today, in the early days of Irish meltdown”In the course of only 2 days, the bankers speculated that Ireland’s wealthy could have put as much as €500m into Germany.
Is it too much to ask that a new national Irish Public bank be set up free from the speculative interests of private banking interests, to serve the needs of Irish depositors to reverse this flow….?
We have yet to hold a public banking inquiry aportioning true responsibility for the above on those in the Irish Central Bank, the Irish Department of Finance, the political parties, the Regulators office.
To the degree we have not done so, Ireland remains toxic deep in its bones.
End
Negative Equity
September 8, 2013
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Ellen Brown of http://webofdebt.wordpress.com/ will visit Ireland to attend three events,12th October, 11am-4pm, Springfield Hotel, Lucan; TBA 14th Oct, 15th Athlone.
—————————————————————————————-
Richie Boucher CEO Bank of Ireland has a basic salary of €690,000. We won’t visit bonuses and perks for now. No doubt Richie sees his salary as chicken feed when compared to what CEO’s of some of the largest banks in the USA get paid:
http://www.bloomberg.com/visual-data/best-and-worst/most-overpaid-in-banking-industry-ceos
Instead let’s compare Richie’s pay to that of the CEO of the Bank of North Dakota:
“As state government employees, BND executives have no incentive to gamble their way toward enormous pay packages. As you can see, the top six BND officers earn a good living, but on Wall Street, cooks and chauffeurs earn more.
- Eric Hardmeyer, President and CEO: $232,500
- Bob Humann, Chief Lending Officer: $135,133
- Tim Porter, Chief Administrative Officer: $122,533
- Joe Herslip, Chief Business Officer: $105,000
- Lori Leingang, Chief Administrative Officer: $105,000
- Wally Erhardt, Director of Student Loans of North Dakota: $91,725″
So what is this Bank of North Dakota?
http://www.salon.com/2013/03/29/north_dakota_is_bringing_socialism_back_partner/
“In North Dakota, however, all that public revenue runs through its public state bank, which in
A solemn crowd gathers outside the Stock Exchange after the crash. 1929. (Photo credit: Wikipedia)
turn reinvest in the state’s small businesses and public infrastructure via partnerships with 80 small community banks.
How the State Bank Creates Jobs
Banks are supposed to serve as intermediaries that turn our savings and checking deposits into productive loans to businesses and consumers. That’s how jobs are supported and created. But the BND, a state agency, goes one step further. Through its Partnership in Assisting Community Expansion, for example, it provides loans at below-market interest rates to businesses if and only if those businesses create at least one job for every $100,000 loaned. If the $1 trillion that now flows to Wall Street instead were deposited in public state banks in all 50 states using this same approach, up to 10 million new jobs could be created. That would effectively end our destructive unemployment crisis.”
Since 1970 a burgeoning shadow banking market in derivatives now reaching €700 trillion fed by Alan Greenspan deregulation and fueled by banking bonuses to lend out the largest loans possible without question and stimulated by political corruption and greed, exported its contagion to the rest of the world.
Since the Wall Street Crash of 2008 various efforts from Basil 111 to the Dodd Frank Act and the Volcker Rule have come into play to ameliorate the toxic lack of regulation in the financial services industry.
Such rules do not go far enough to protect both government and public money from the mixture of investment and commercial banking intertwining that led to financial collapse. They do not come close to the demands in a Glass Steagall follow-up response to the Wall Street Crash to regulate the financial industry.
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Legislation
“Glass–Steagall legislation is four provisions of the U.S. Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms,[1][2]along with proposed similar provisions in the U.S. and elsewhere.”
Rather than banning derivative trading, some light brakes are proposed:
Provisions in
http://www.mofo.com/files/uploads/images/summarydoddfrankact.pdf
The following is reprinted with permission from Ellen Brown, http://webofdebt.wordpress.com/ …”Syria In The Cross Hairs..”
“In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.”
Relaxed banking regulations are still the norm following the crash of 2008.
Private banking in Ireland has now become part of this global network. The 20% shareholding interest of Irish stakeholder interest in BOI will copper fasten the stranglehold of international interests who’ve allowed Ireland to sink like a fly into its web of debt prey to international debt spiders.
An alternative approach to banking is required in Ireland to protect Irish people from the austerity, eg €100 million cuts in education overseen by Ruari Quinn of Labour in the next budget, 1000 Irish people leaving this country each week. The yawning chasm of private debt and mortgage negative equity strangling the Irish economy.
Boucher deserves a salary cut of €500,000 for a less than smart appearance before the PAC.
Part 2
http://www.youtube.com/watch?v=9jxDiGvDCPU
Here’s Wilbur Ross describing the current state of BOI. We’ll ignore his false statement of 2% growth rates in any quarter since Ireland’s financial collapse, but he makes some interesting points:
- Deutsche Bank have a stake in Bank of Ireland to the tune of 35%.
- Irish government have a stake of 20%.
- Private investors including public institutions on behalf of large scale investor funds own the rest.
Ross states BOI has 1500 UK post offices selling its products plus it also owns a bank in Connecticut.
Wilbur Ross makes the point:
“What’s interesting is that when the new party came in it didn’t reverse the policies it accepted them and is now implementing them” “They are embracing the concept of private capital coming in…”
Ross refers here to Fine Gael/ Labour non reversal of the FF policies on banking and their support for private investors. I’m guessing he can’t believe his luck. He has the state taxpayers on the hook through their 20% stakeholder involvement ready for him as puppeteer to pull their strings for any further recapitalisation needs or any other needs.
What more could private investors want?
Probably to scalp as many of those in negative equity on their mortgage book as is possible to maximise profit for private stakeholders, the 80% of BOI.
Any profit because these are international investors will be exported out of the country to usory without any obligation to stimulate lending to risky Irish SME’s.
Perhaps they should consider renaming Bank of Ireland, the Irish Bank of External Settlements…?
So it was with renewed interest in BOI one looked forward to the appearance before the Public Accounts Committee of the Dáil the CEO of BOI to provide more information to us on how BOI is doing given, for example, that 45% of Irish mortgages issued by the bank between 2005 and 2011 are now in arrears, or questions like:
- The drag this puts the Irish economy under
- How much the BOI is doing to stimulate the Irish economy through its lending practices
- What reforms have been put in place to improve Bank of Ireland since the Irish financial collapse
- What new regulations have been put in place governing its lending policies monitoring its loan book
- Would it provide full disclosure and access to all documents in the bank related to the infamous state guarantee and collapse of the bank leading to its ‘rescue’ by the state?
- What bonuses does it pay its staff
- How many mortgages on what terms were issued in the last year
- Debt write-down
The following exchange between Richie Boucher under the rather anodyne questioning of Stephen Donnelly TD.
Note Boucher refers to the public statement of accounts of the bank. Note his distinct discomfort in providing any information beyond what the carefully crafted and very slim pamphlet (annual statement of accounts) covers. He dives into the booklet(similar booklets were provided previous to the crash telling of a soft landing) to reveal the €1.4 bn negative equity rabbit he’s created out of thin air.
Any real mark to market of such a figure as to the mortgage losses on the BOI loan book would laugh at such figures as the product of blind myopia and snake oil refusal to reveal true losses that might offend his shareholders.
Here’s Richie Boucher:
http://www.youtube.com/watch?v=k3YkCWJIMXE
He says “I can give you the answers based on the disclosures in our accounts …” Stephen Donnelly asked the simple question if a mortgage of €500,000 could only realise €300,000 through the sale of a house did Boucher’s use of the term negative equity mean that house was €200,000 in negative equity?
Boucher embarked on an unctuous dissemination of disinformation by refusing to be drawn on the question using hide and seek disinformation terms such as the indexation of the mortgage book related to mortgage lending in general across the board…. He was distinctly uncomfortable on being drawn out to explain this single example.
English: Bank of Ireland HQ Baggot Street (Photo credit: Wikipedia)
It turns out ‘negative equity’ is not understood by Boucher in the terms we understand it. Its a jack rabbit conjuring trick. BOI and Boucher look at the €300,000 the house is now valued at, but they have no real interest in this. All they are interested in is whether the client can repay the mortgage at its current full value.
The client following an inquisitorial persecution on their ability to repay all or parts of the mortgage following a process of sucking blood from a stone will show an inability to realise full repayment of their mortgage under current terms.
All sorts of shenanigans will now come to bear on that client out of which Richie Boucher and BOI will magically use algorithms based on the indexation of loans and other abstruse mathematical formulae to bury the bank losses.
The last thing any banker will wish to do with his bank under the spotlight is mark to market its losses. The first thing any government or regulator must do in such a situation is force a mark to market write down of losses.
It turns out unctuous bombast and snake oil means Boucher rewrites the English language to replace the term negative equity with ‘negative net worth’. Rather than answer questions outright on how many mortgages are under water from a mark to market valuation difference between the price that could now be obtained by selling a property and the odious mortgage, Boucher serves up the conjuring trick estimate of how much the bank can realise back from its mortgage loan book.
No doubt Boucher likes to delude his private shareholders with calculations based on a growing economy and other cosmetic cover ups of real losses.
It’s clear BOI(Bank of Ireland) is a misnomer. It’s no longer a truly Irish bank serving the needs of Irish people, its purpose is to serve the needs of international financiers wishing to extract usurious interest and profit from the people of Ireland. It cannot be relied upon to put the needs of Irish people first.
http://en.wikipedia.org/wiki/Negative_equity
Overall, Boucher’s performance including his illusive refusal to answer questions combined with the overall light questioning brought the PAC committee’s ability to question bankers into question. A showcase for publicity seekers on the PAC, government back benchers made to look good, that something was being done to fix the banks….much ado about nothing.
Banks overstate their ability to get this money back and understate real losses. They use false assumptions that the economy will improve or the ability of the individual to repay will improve. Real losses are distilled into false propaganda that bend language into a distortion to hide their real losses.
Its schenanigan mathematics used to cover and understate bank losses. The client is the victim of scamming by the banks to create the Celtic tiger lending 100% mortgage spree fed by fat bonuses and mad salaries.
The client is being bled dry on top of this with taxes extracting his money that magically gave to the banks the client’s taxes for the losses incurred by the banks in selling the odious mortgage to the client in the first place…Joe Sucker in negative equity who has just lost his job due to the bank busts, paying through the noses through reduced social services, serf taxes and charges to bail out the banks, is to be further asset stripped of his mortgage debt repayable in full to the banks.
All endorsed and subscribed to by Fine Gael and of all parties, the Labour Party, government of the banks, by the banks, for the banks.You couldn’t make it up! Debt extraction is the new politics.
This madness is supported by government who are not forcing the banks to write down debt and burden share losses. Rather than have to pay twice for the Celtic tiger, such clients in negative equity should at least not to have to pay taxes. Their taxes should pay for their mortgages. That, or a basic level of debt write down from Ireland’s Sheriffs of Nottingham.
Donnelly then asks “Of the €28 billion of irish mortgage lending what is Boucher’s guess of the its market value..” Boucher: “We don’t mark to market our books..” Marking to market you recall was a favorite practice of Enron’s Berni Madoff who used this conjuring trick to overstate and vastly inflate false mushrooming estimates of his book value.
Boucher uses the practice of not marking to market to hide market losses. Horses for courses! According to Boucher, they expect the vast majority of their lending book to be repaid!
We have to listen to this unadulterated rubbish while at the same time expecting the bank to police itself.
Well done to Donnelly for his questioning even though his questioning was self limited and did not hit the mark. Unfortunately in its present 20% equity stake in the BOI the government has impaled itself as part owner making us liable for further losses if the bank fails. We need no greater evidence than this interview to show BOI should be immediately closed down and a public bank owned by the people serving the needs of Irish communities, be set up in its place immediately.
With a total loan book of €28bn Boucher states BOI have a €4bn impairment provision so we see it’s a delicate position re addressing this whole question of ‘negative equity’ and debt write off. The BOI needs to hide its need for further recapitalisation.
There’s a curious point around 9min into that video with Boucher stating €4bn and Donnelly stating €1.4 bn as the impairment but I’m sure this can be cleared up.
Let’s look at BOI a little more closely. Consider its name BOI (Bank of Ireland). Its a bit of a misnomer given who presently owns the bank and its new serf paradigm to extract as much from its victims remorselessly:
Wilbur Ross on Bank of Ireland and state involvement
http://www.youtube.com/watch?v=9jxDiGvDCPU
Ellen Browne
http://truth-out.org/news/item/18604-making-the-world-safe-for-banksters-syria-in-the-crosshairs
Max Keiser on Michael Noonan and Irish banks
http://www.youtube.com/watch?v=Q-_IR_yNg7c
So the same suckers who paid up the scam Celtic Tiger bank loans to pay for tricked property prices during the Celtic tiger, the same taxpayers the banks lean on to pay up for bank losses, get the privilege unlike the rest of us only paying once through higher taxes, less social services, they are expected by the banks to pay up multiple times.
They get to pay the government for bailing out the banks and get to pay the banks for their negative equity. They get no debt write-down.
So what taxpayers are paying the most tribute to the banks? The answer is clear. People with disabilities in Ireland, who cannot even get a service never mind one that will be cut back:
http://www.independent.ie/irish-news/disabled-targeted-in-budget-cuts-29531153.html
http://www.irishexaminer.com/analysis/disabled-people-see-promises-constantly-broken-239306.html
So the corrupt logic is burden sharing for People with Disabilities, no burden sharing for the troika, the banks, the top 1%.
Bill Frezza writing in the Washington Post http://www.huffingtonpost.com/bill-frezza/toobigtofail-banks-gamble_b_2424156.html reveals how the large TBTF (Too Big To Fail) are laundering democracy to create a new empire of banks controlling politics and public finance.
For example, in Ireland, the banking sector has virtually taken over the Fine Gael party having already annexed both the Greens and the Labour Party.
We’re told we have no need of a reformed Seanad. The troika has replaced the Seanad both literally and metaphorically with its own troika influence.
But Ireland’s story is a mere offshoot of what’s happening on a bigger stage in the USA.
Here’s how it works:
Referring to Bernanke’s QE, Bill Frezza writes: “But what happens to all that freshly printed money after it gets parked on bank balance sheets if it’s not loaned to businesses and consumers? Perhaps we could sleep at night if it just sat there, as a cushion against the recession that lies ahead. But unfortunately, the “banks” appear to have flocked back to the derivatives casino, confident that as officially recognized TBTF institutions they are free to privatize gains, gorging on bonuses while the sun shines, knowing they can socialize their inevitable losses.
Falling Loan to Deposit ratios
To see how much of your money they are playing with, take a look at the scariest economic chart of 2012.”
http://webofdebt.wordpress.com/2013/08/26/the-leveraged-buyout-of-america/
“According to legal scholar Saule Omarova, over the past five years, there has been a “quiet transformation of U.S. financial holding companies.” These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach. They have used legal authority in Graham-Leach-Bliley to subvert the “foundational principle of separation of banking from commerce”. . . .
Through banks similar to the now misnamed BOI extracting rent from the Irish people, these tentacles of austerity commerce replace the power of government with the power of puppet masters in the banking sector.
“It seems like there is a significant macro-economic risk in having a massive entity like, say JP Morgan, both issuing credit cards and mortgages, managing municipal bond offerings, selling gasoline and electric power, running large oil tankers, trading derivatives, and owning and operating airports, in multiple countries.”
http://seekingalpha.com/article/1109701-repoed-how-the-fed-and-depositors-fund-banks-big-bets
“According to a recent piece in the Wall Street Journal, the loan-to-deposit ratio is now just 72% – conventional wisdom has it that banks would prefer that ratio to be as close to 100% as possible.”
QE in the US has been hijacked by the banks. It’s impossible for small to medium scale business investors to get loans. Mortgages are not being handed out even to the most secure of investors. The banks are coining it using deposit money to invest in easy money investments in the shadow economy. QE is being used by banks to set in train another crash.
“And when all of this comes to pass, like clockwork journalists and pundits will be sure to blame it on capitalism! As if real capitalism could exist when investors aren’t obliged to bear the risk of their own losses. Foisting losses on taxpayers, then debauching the money supply to cover it up, is not capitalism. Alas, it has become business as usual.”
Response to the crisis in 2008 followed by the crash in the euro zone of countries such as Greece and Ireland has been abysmal. This has happened in spite of Dodd Frank and Bailey pretence at disinfecting the shadow economy toxic derivatives market and failure to dismantle TBTF(Too Big to Fail) banks such as JP Morgan, Bank of America breaking them up into smaller and more manageable entities less threatening to the US economy.
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
In 1932, the Pecora Commission was established by the U.S. Senate to study the causes of the crash. The following year, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.”
It’s now clear The Dodd-Frank Act has failed to regulate the financial markets. More legislation is required to break up the TBTF banks to smaller entities separating investment banking from commercial banking. New regulations for both are required with emphasis on the regulation and detoxification of derivative based shadow banking currently under the radar and dangerously deregulated.
More banks run on the public banking Bank of north Dakota model need to be set up. Shadow banking needs radical overhaul and disinfection.
To boost economic activity, preserve democracy, lessons should be learned from the experience of public banking in the US where profits go to communities rather than private investors.
Its time public representatives educated themselves to take on the banks to defend democracy to change commercial and investment private banking systems into more targeted public interest goals.
In truth this is an impossible task. There is a divergence between the interest of private banking and the public good.
What’s needed is a public bank that will make creative and positive choices to remedy damage done to the Irish economy by the worst practices of private banking interests within the BOI and other so-called ‘pillar banks’.
Such creative choices could include the release of the 45% of negative equity mortgages at a writedown to a new Irish public bank run along similar lines to that of the BOI taking toxic mortgages out of the toxic grasp of BOI.
Further information on Public banking here:
http://publicbankinginstitute.org
http://useconomy.about.com/od/criticalssues/p/Dodd-Frank-Wall-Street-Reform-Act.htm
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