Getting Black

February 9, 2015

mountainNoticed Simon Coveney recently being hauled out to make comments on Finance. He’s a great Minister for Agriculture, Food, the Marine & Defence, but to be frank, he hasn’t a clue about economics.

For example, he is now frequently to be heard peddling the view that FG/LB have saved the Irish people over €50bn by renegotiating our debt in particular ‘the terrible deal done by the previous government re the promissory note’.

Unfortunately, though tremendously gifted wearing his other hats above, on economic matters he is dead as a dodo, but not more so than Enda Kenny.

To illustrate my point, let me instantly gift you €60 bn in savings on what you owe me. You owe me €160bn, which means now you only owe me €100bn. Ludicrous isn’t it? Yet its the same 3 card trick peddled by FG/LB propaganda as it attempts to dupe the public. It all depends on how well you can be conned into believing you owe €160bn of debt incurred by the 1%.

Take the promissory note, an odious device used to take the Anglo bondholders to nirvana at the public’s expense approx €31bn to bail out Anglo. Bondholders never liked it. Worried that a future government could repudiate this debt, they wanted it amortized into bonds under contract underwritten by international/global commercial law.

Embarrassed that more favourable interest rate tokens were given to Greece and Portugal they laundered the Promissory Note into long-term bonds and then sold the pup to our morons that extending the pretend, tiny clips to repayment interest tokens,  lo and behold we have Simon Coveney & Co telling the audacious propaganda lie, they’ve saved the Irish people €50bn.

Enda Kenny was blowing since 2012 that a bank recapitalisation deal was on the table for Ireland. Never happened. 2 weeks ago FG/LB were supporting a debt conference for Europe to support Greece. Now they’ve uturned and their position is Greece needs to tow the line and do a deal like Ireland’s extend and pretend.

Except with Greece you can’t extend and pretend. They are beyond bankrupt and their economy is unviable beyond redemption under the weight of current obligations. Severe damage through austerity is being inflicted on Greek people to pay for crimes of the 1% in Greece and elsewhere in Goldman Sachs who manufactured their fleecing.

Irish Water

Thomas Molloy writing in the Sunday Independent Business, p1 “Sources said credit approval has now been secured for another €250m from domestic and international banks…..advanced discussions with two other international commercial banks for a further €200m of bilateral loans…the utility has recently signed a €100m loan agreement with Ulster Bank”

WOW, these guys are borrowing left right and center and the money to pay for it is coming out of your pocket! Irish water is a financial paper boy dream. The opposition have called for a Dail Debate to answer q’s as to how it is currently funded. Borrowings above will be added to your bill later.

Think of all the money Irish Water are saving the taxpayer?

Continuing his reign as Ireland’s Don Quixote, Enda Kenny, to outdo the above is currently making a mess of the privatisation of Aer Lingus. He’s looking for cast iron guarantees that if government sell their stake beyond Minister for Finance retaining a shareholding of at least 25.1% that Enda will consider these.

Such guarantees carry as much weight as a Fine Gael / Labour promise before and election. Looting, pillaging, fracking of companies has gone on for time immemorial on foot of such guarantees.

The question is why the airline on foot of guarantees was not sold to Michael O Leary of Ryanair?

A very useful deal whereby planes could have been maintained at Dublin airport as a central hub of European operations along with guarantees on competitive rates and maintenance of necessary routes and further development, was squandered and squashed by Fine Gael / Labour and FF.

Our hospital ratings have slipped way below the European average and now below some central European countries. Our educational system at 2nd level is under attack with proposals to demolish external regulation and do away with the Junior Certificate. Another austerity money-saving measure masking under the guise of educational reform of all things.

Our employment statistics have been falsely corrupted and falsified with zero hour contract jobs masquerading as real jobs. Zero contract means in any week though you are contracted to be available for work, there may not be any for you that week! Salaries have been decimated with young nurses and young teachers forced to accept pay levels beneath those offered to those colleagues who happen to have other contracts negotiated before the financial meltdown.

Young people have been especially targeted by the soldiers of austerity. Generally, young people have been fairly conservative, compliant and obedient in the wake of salary cuts and increasing taxation increasing up to 75% over recent years compared with previously. 10’s of thousands have endured the brunt of negative equity and because of unemployment or pay cuts their mortgages are insolvent and little has been done to rescue them.

Unbelievably a shortage of housing in urban areas especially in Dublin has been allowed develop in spite of needed construction jobs; this has led to a boom in property prices. Yes, same boom that led to property collapse in 2008. Government have great plans to deal with this, but none for now.

Some believe it has been induced by the financial paper merchants to pretend the economy is recovering, pretend the capital base of the banks is stable and secure, prevent banks from further losses due to property writeoffs at low valuations. Young people have suffered the brunt of this and their salaries are being extorted through high rents.

Government has done little to nothing to prevent property scams selling sub prime mortgages at punitive and extortionate interest rates. The Central Bank has a lot to answer for in stoking the previous bubble and its lack of finger prints on any form of regulation that would have prevented financial meltdown.

One young TD, Paul Murphy, who has done tremendous work to help organise a nationwide peaceful protest against water charges that brought hundreds of thousands onto the streetsGary Varvel: The Administration Targeting Journalists in Ireland over the past 6 months, was arrested at 7am this morning by six gardai.

His alleged offence was he was wanted for questioning in regard to an incident where Joan Burton TD, leader of the Labour Party and a member of the Economic Council who run the financial affairs of this country on similar lines to the Politburo standing committee that rules China, was detained by protesters and suffered verbal abuse for a number of hours in her chauffeured car in Jobstown, Dublin.

He was brought to Terenure Garda station for questioning. Democracy is being replaced by police state methods of control and intimidation of democratically elected politicians preaching peaceful protest!

Demise of Euro 

Demise of the euro continues its slow titanic disappearance beneath the waves. Trillions in financial paper derivatives sloshing around the world are destabilising currencies around the globe. The ruble, the Swiss franc and currently Greece are targets of speculators with access to mountains of financial paper that manipulates world currency markets.

Such instability is not a recipe for economic sustainability or human progress. The sooner the paper mountain crashes and is replaced with something more solid and secure the better for Greece and the euro.

The euro has been and continues to be an unmitigated disaster. Cormac Lucey in Economic Outlook, Sunday Times, Business P4 08.02.15, writes:

“An  2008 OECD research paper, Monetary policy, Market Excesses and Financial Turmoil, looked at the impact of common eurozone interest rates, inappropriate to national circumstances, over the years 2001-6. The researchers found a correlation in excess of 80% between the inappropriateness of interest rates considering national circumstances and the increase in national housing and construction investment for the 10 eurozone members, including Ireland, surveyed.”

Lets face it, the eurozone is just one big Lehmans full of subprime lending to its own members.

Its been made worse by divide and conquer bailouts that are making matters worse with the 1% moving into more control of the 99%. The real economy flounders while the world of financial paper bubbled by QE masquerades as a false economy pretending it is real through methods that are becoming more police state as time goes by.

The original ideal of the eurozone was to level playing fields between the members in particular those on the outer core vs inner core.

Instead mountains of debt have been driven between outer core and inner core members to unsustainable levels.

Meanwhile the Irish Banking Inquiry continues. If you would like to read transcripts or entertaining videos see them here

Transcripts are here:

Prof Bill Black starred last week stating Irish Banking guarantee was the worst financial own goal in history; the collapse with decent regulation could easily have been prevented.

He argued behind banking collapse generally you find CEO’s driving collapse.

In Ireland’s case we need to microscope the Central Bank, the ECB, the Regulator and Irish government tampering in economic management and regulatory matters.

Better way of course to do this is to examine the bank executives themselves and follow the trail led by some of their loans….but we won’t get that.

Gresham’s Law describes bad money driving out good money. The euro has brought about ruin for many in Ireland. Perhaps financial meltdown was worth it in terms of our european membership of the euro area.

In terms of loss of sovereignty and our current debt levels and ensuing losses exported onto the shoulders of our unborn, in my view, it has been an unmitigated disaster growing by the day.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: