Lord Haw Haw

April 21, 2014

LordHeeHawReal GDP is the one indicator that says the most about the health of the economy and the advance release will almost always move markets. It is by far the most followed, discussed and digested indicator out there – useful for economists, analysts, investors and policy makers. The general consensus is that 2.5-3.5% per year growth in real GDP is the range of best overall benefit; enough to provide for corporate profit and jobs growth yet moderate enough to not incite undue inflationary concerns. If the economy is just coming out of recession, it is OK for the GDP figure to jump into the 6-8% range briefly, but investors will look for the long-term rate to stay near the 3% level. The general definition of an economic recession is two consecutive quarters of negative GDP growth. “


Oops according to http://www.tradingeconomics.com/ireland/gdp

GDP annual growth rate for Ireland  was -0.70% with overall growth rate -2.30%. Previous blog elaborates on the decline in pharmaceuticals due to patent cliff.

Declines in GDP per last blog due to austerity, global recession, ending of patents for MNC’s, no worries, according to ESRI, lets simply  hide the facts and ignore GDP and measure another less reliable economic indicator instead, GNP (Gross National Product). GNP can be primed by excessive lending into the construction sector, for example recent Celtic Tiger experience.

Lord Haw Haw propagandists from the ESRI make the following assertion


” The ESRI forecast gross domestic product (GDP), the more standard measure of output, would grow by 2.6 per cent this year, and by 3.5 per cent next year.

It warned, however, that the GDP numbers were being distorted by the so-called “patent cliff” in the pharmaceutical sector, and therefore gave an unreliable picture of activity in the economy.”

It’s the other way round, the ESRI have twisted globally accepted standard indexes such as GDP, denigrate them because they do not paint the pretty picture they require, and massage their figures for economic outlook.

Judging by the declining figures due to patent cliff issues there is no reason for the overly optimistic propaganda figures of 2.6 per cent this year, and by 3.5 per cent next year given above.


According to John Walsh of the Cork Examiner,

“…… the patent cliff in the pharmaceutical sector where generic drugs are increasingly replacing patented products in overall output. Low value generic drugs are causing a big drop off in profits in the sector, which has knock on effects for GDP figures.

“….. the amount of sales revenue and profits in the IT sector being moved abroad, even though tech firms have significantly increased employment levels over the past few years.

Again, the GDP figures are skewed by lower profits booked in Ireland, but the domestic economy and the GNP figures have benefited hugely from the increase in real activity.

ESRI chief economist, John Fitzgerald, said using GDP figures for real growth in the Irish economy is now misleading!

However, the European Commission uses GDP, which will present problems when calculating the economy’s structural deficit, which is a key part of the fiscal stability treaty, he noted.

Mr Fitzgerald said the Irish economic recovery was being underpinned by a surge in investment.

The ESRI is forecasting an increase in investment of 9.6% this year and 10.4% next year.

Exports are expected to grow by 3.7% in 2014 and 4% in 2015. The current account as a percentage of GNP is forecast at 9.3% this year and 9.9% next year.”

Ironically, the Cork Examiner sadly has just announced the culling of 50 jobs. It isn’t feeling the economic turnaround.

John Fitzgerald is becoming the Irish austerity version of Lord Haw Haw.

Fitzgerald refers to “sales revenue and profits in the IT sector being moved abroad..” Hard to know what he means there as he does not explain. Perhaps he means the profits of U2 being sent offshore. Accepted practice of profit flows from MNC’s in other jurisdictions channeled into Ireland rather than at point of sale in other jurisdictions is controversially the means by which a large part of our GDP gets inflated?Korean_Ferry_Sewol_Capsized,_2014

On the radio recently when pressed on whether it advisable the brakes on salary scales being removed as a result of the feel-good projections might be a good idea, Fitzgerald offered it a good idea that maybe this should begin with salary scales in the Central Bank.

Perhaps he has an eye on a job there. ICB is part responsible for the poor to disastrous negotiations on our promissory notes and troika deal.

Into this vibrant turnaround water charges or approx €240 annually have just been announced to add to the woes of hapless consumers.

This will  pay for the installation of meters and a bureaucratic quango white elephant packed with huge salaries without one burst pipe being fixed. When the white elephant is up and running amok, it will try to leverage an investment bond from international markets to pay for the development of infrastructure.

We’ve had this mess before with the privatisation disaster of Eircom http://en.wikipedia.org/wiki/Eircom#Privatisation

“The Eircom flotation is considered to have been an example of a stock market bubble— after the initial hype of the flotation died down, the stock price fell rapidly. Many of the 500,000 small investors were angered by the significant financial loss they incurred, blaming the government for not sufficiently warning them of the risks inherent in stock-market investment.

Since privatisation, Eircom penetration of landlines has fallen from 82% to 69%. During this period, there has been a large increase in mobile phone ownership and a significant rise in line rental to the highest in Europe.”

ITs a distinct probability Irish Water will follow the same vector and be a disaster for Irish consumers. Raising the necessary stock mark bonds required for investment in Irish water will lead Irish Jack and Jills perilously exposed to exploitation and the vagaries of the global financial system with no prisoners taken. Another example of government incompetence.

Ironically a recent White Paper, on Universal Health Insurance had no costing proposals though the definition of White Paper implies that unlike as in a Green Paper that outlines proposals and asks for debate, a White Paper is meant to detail specific plans with costings. Ah well, government painting green white is par for the course.

Backtrack for a moment and recall water was high on the agenda for the troika negotiations.

Often as quid pro quo for bailout of underdeveloped nations who fall into a state of financial collapse, bailout terms involve lucrative contracts for international investors. Suffice it to say consumers will be on the hook for either privatisation of the water supply when like Eircom, Irish Water will be sold into the private sector and on the receiving end for higher charges and low investment looting by international investors. The present course adopted by this government is worse than selling off our harbours.


Instead the Irish Pension Fund assets should be spent on actually repairing pipes and fixing the leaks.

Meanwhile possible sanctions war in East Europe has faded into the background with fears of an energy crisis in Europe if Russia increases its charges for gas.

Part 11

The banks have not been fixed and the property sector is in the midst of a growing mortgage crisis ignored by the banks.

In spite of the distinctly wild optimism of Fitzgerald of the ESRI, our banks continue to teeter on the brink of an unresolved mortgage crisis. Property prices are still far too high with banks not lending. Their loan books are still infected with losses from the property sector that have yet to be marked down with losses masquerading as assets. A run on Irish banks remains a distinct possibility and may have already begun.

According to Shane Ross, Business, 2, 20 April Sunday Independent:

“In 2011 Wilbur Ross….and his associates bought a 35% stake in BOI at 10 cent a share. Wilbur is a vulture investor. Last month he sold a third of his shareholdings for 33 cent each. Ross has extracted his entire original investment from the Bank of Ireland and now holds his remaining stock for nothing. He has a free ride. Wilbur’s intentions with the remaining holding are critical. Rumours on the market are that he has promised not to sell before June 25. Wilbur does not hang around earning goodwill. He is not in Ireland on a mission of mercy….

….ask Wilbur specifically what his intentions are for his remaining massive holding? If he refuses to promise to hold on for several years, fasten your safety belts….”

In the background looms Mario Draghi:


“The ECB remains in close contact with the Central Bank of Ireland with regard to the situation of the Irish banking sector.”

Mr McGrath said the letter was far more “sober” than the assessment of the banks by the Government.

He added the ECB was “distancing” itself from tests of the banks by the Central Bank last year.

Mr McGrath said he was “deeply concerned” that Mr Draghi has raised a question about the “viability of all nationalised banks”.

Amidst this turmoil one can be sure of one thing, that is that Lord Haw Haws from the ESRI fueled by statistics from the IRISH CSO materialising 50000 jobs  in the Irish agricultural sector out of nothing, will stoke the flames of propaganda assuring everyone all is well:


“Sewol: “Our ship is listing and may capsize.”

Jindo VTS: “How are the passengers doing? …”

Sewol: “It’s too listed that they are not able to move.”

A short time later, another exchange takes place:

Jindo VTS: “Are the passengers able to escape?”

Sewol: “The ship listed too much, so it is impossible.”

The transcript may help answer one of the major questions about the capsizing: Why didn’t more passengers escape on lifeboats?”

Perhaps one should ask Captain Kenny, aka Captain Smith of the titanic, aka “Sewol Capt Lee Joon-seok”, why passengers on the Irish titanic are reassured.

Irish assets approach ever more dangerously close to the  ‘extraordinary measures’ of  Mario Draghi involving bail-in for depositors in Irish banks. They face the tightening noose of austerity and the siphoning out of the Irish economy of 100 years of efforts to improve public services for the Irish people.

We abhor the absence of a public bank inquiry investigating the mechanics and procedures of loan approvals in the Irish banking system prior to 2008, the shredding of notes of public service officials sufficient by itself to have the attendees at the ‘guarantee’ meetings removed from office (this has not happened), the coverup, propaganda and consequent disastrous negotiations of the promissory notes and bailout terms.

This leads to the inevitable  conclusion that though the Irish Sewol has not sunk yet, this should not reassure us that it will not shortly be deja vu time, when we realise sinking was inevitable, if only we had seen through the propaganda of Irish Lord Haw Haws who’ve cost us so much in the past and who still in situ create an even bigger mess.






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