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
I
rish 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.

http://www.irishtimes.com/business/economy/kenny-welcomes-measures-to-support-ireland-s-bailout-exit-1.1517904

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.

http://www.businesspost.ie/#!story/Home/News/Bondholders+ignore+Moody’s+junk+rating+for+Ireland/id/19410615-5218-50f9-6234-a54dc2746364

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

 

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