Who Done It?

March 1, 2015

During the week we had David McWilliams before the banking inquiry:

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Good McWilliams gave account of his dire warning re collapse of the housing bubble in Ireland in years leading up to 2008-10. Very bad he advised government on a guarantee however subject to conditions and limitations he meant this to be. Very ugly in hindsight he does not accept what a mistake he made.

According to McWilliams what he advised was a ‘limited guarantee’ made subject to conditions perhaps lasting only a few months. However, such a ‘limited guarantee’ would merely message all stakeholders to get their money out asap before the door closed.

The guarantee must have sounded like manna from heaven to Brian Lenihan as he listened to this advice. Lenihan would be aware that depositors from large institutional stake holders to property developers with large tranches of their money secreted away in storage in Anglo, to small depositors stood to lose out big time. How many government ministers had their savings locked into Anglo with  gilt-edged promise of security of former years?

The stage was now set to bet the financial well-being of the state against the financial well-being of the banks.

The state would lose in one of the greatest financial own goals of history. Clearly McWilliams is a lesser man than the man required to confess to such a mistake.

But what should McWilliams have advised?

Clearly one of the largest stakeholders involved in the calamity facing the Irish banks was the ECB. Because exposure to the crash of 2008 and exposure to losses faced by the Irish banks was upward to 40% of total losses, European banks in particular both German and French banks, should have been consulted by way of consultation with other heads of government through their role in the European parliament.

A joint decision should have been commissioned at European level. We have to believe the advice would have been strictly against a blanket guarantee that would cripple the Irish state and bring about its financial collapse.

This would have protected Ireland’s interests giving Ireland the security of a fair deal that would have to be passed and ratified by fellow members of the European parliament.

Ireland would be protected against a foolish own goal giving credence to the view that Ireland brought its own calamity upon itself.

The deal for Ireland would have to be a deal that would be offered without prejudice to any member of the European parliament.

Clearly the deal would not have meant that Ireland would sink itself with a guarantee that turned a banking crisis into a financial meltdown that would force a bailout of €67 bn with odious and penal interest rates  seeing  shares in French and German banks leap 24% overnight on the news of ‘the guarantee’.

Brian Lenihan was given a dodgy hose with holes in it fed with taxpayers money to feed the banking spending spree for the rich. The fire brigade was never called.


“The existence of orderly and transparent debt work-out mechanisms would undoubtedly provide a more appropriate platform to resolve sovereign debt crises in more optimal ways.”

Ireland squandered its opportunity to force an orderly and transparent debt work-out mechanism fair to its citizens.

Obedience, compliance, subservience and incompetence became the mantra of the time with taxpayers being foolishly extolled to ‘take one for Europe’. Parish pump politicians revealed their fragile weakness.


No doubt critics of this approach will point out there was no formal means for dealing with such crises in Europe.

There was no banking union with which better strategies could be effected.

In its absence the European Commission, International Monetary Fund and European Central Bank, who formed a group of international lenders laid down stringent austerity measures that became the groundwork to resolve later crises in Europe.

In this way the collective could be protected from responsibility and blame and punishment levied on those on brink of meltdown. The collective revealed it was run by German banks and the Bundestag with priority given to the outer core taking a hit to protect the inner core; not the other way around.

This would divide Europe further.

The irony of this is membership of the European union was guaranteed to give stability and avoid such dangers for its members.

The outcome of this for Ireland has been a regime of brutal austerity the European commission itself warns is not working.

Full report on Ireland located here:


“In Ireland’s case that translates as high levels of public and private debt, ongoing issues within the banking sector, in particular continuing losses, and high levels of unemployment.

The commission has a six-step imbalance procedure by which it grades the severity of the macroeconomic issues facing each country, with one being the lowest and six the highest level on the scale.

Ireland is currently at four, which is down from six over the past two years.”

The FG/LB coalition in Ireland speak of ‘fragile recovery’. Recovery which protects the rich, creates further divisions between rich and poor, is fragile.

The property market has returned to the mistakes of the past with shortages fuelling a housing bubble in Dublin and in large urban areas throughout the country.

Broken banks are feeding off the frenzy turning induced shortages and evidence of a property bubble into the false propaganda ‘the tide is on the turn’ and recovery is taking hold instead of the return of a malignant financial cancer fed previously by free lending now fed by shortages fed by incompetent government policy.

The banks and the property market exist in a catch 22 limbo. If property prices fall due to a new construction boom, the capital base of the banks will be negatively impacted due to greater numbers falling into negative equity.

If property prices rise as they are now, high levels of public and private debt will put further pressure on the banks.

The solution is simple but unpalatable to the wealthy. Greater investment providing for the needs and well-being of the majority with a much fairer proportion of taxation taken from the rich by way of Capital Gains Tax, Corporation Tax, and tax on high earnings. This should pay for a fairer society with increasing numbers required to staff hospitals and schools and frontline public services.

But above that we require debt write-down that goes further than ‘extend and pretend’. Taxpayers should demand write-down of unfair and odious debt. But this FG/LB coalition elected with this one mandate above all else, has failed miserably to deliver real write-down.

Instead we are treated to the current propaganda of Enda Kenny telling the public the coalition have saved the Irish taxpayer €50bn.

We’ll have to await forever for the accountancy exercise that itemize these savings. An uplifting sense of humour is required to swallow your disbelief at such illusionary and delusional politics.

The irony is Irish taxpayers pay almost equal amounts of tax to that paid by their peers in France and Germany. But this provides for virtually free healthcare in France with a visit to a GP costing €7 compared to €60 + in Ireland not including purchase of medication.

The solution to this dilemma espoused by the European commission is for member states to carry out structural reforms and continue to consolidate their public finances. This is european, eurospeak for ‘austerity’.

Structural reform is a euphemism for radical overhaul of the public services. Under the mask of making the system more professional and efficient a culling of numbers working for the public sector is planned. Bureaucracy and paperwork becomes an industry impeding the delivery of services under pretence of reform.

Statistical and percentile analysis of the impact of paperwork and bureaucracy on existing services providers is non existent.

Nurses spend all their time filling out forms describing how patient A was given a cup of coffee. The system keels over into a trolley service in Ireland with the unimaginable now accepted as normal.trolley

The idea that any human being be left waiting for a bed on a hospital trolley should be anathema to any civilised person.

Clearly the European commission’s recipe of cutting state deficits means cutting and culling public services. It is drawing Europe into a future with Ireland as its poster boy. The economy is run and controlled by the banks, for the banks and of the banks.

The taxpayer is drawn into the role of bank serf with one rule for the bank serf and another rule for those who wield financial paper where the rules of morality including rules of capitalism, do not apply. No tax for the rich, deregulation for the financial industry, more regulation for the poor taxpayer.

Where write-down of debt exists for the rich; no debt write-down exists for the poor.

Now the banks have their fingers in the greasy till (Yeats September 1913):

What need you being come to sense,
 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?
 For men were born to pray and save:
 Romantic Ireland's dead and gone,
 It's with O'Leary in the grave.

The banks of Europe are set on a path to dry the marrow from the bone, to plunder public services for taxpayers, to repay odious debt.




The FG/LB coalition are trying to ram through with medical organisations what remains of their universal healthcare policy, namely free healthcare for children up to the age of 6 yrs. Cost of this daft proposal is approx €28ml about what extra is required to end the debacle and calamity of trolleys in the A and E’s. It’s a boon to first time parents who without much experience in such matters, will regard every cold as reason for a visit to the doctor.

Given local medical practitioners, already stretched with waiting lists, will deliver this service, you better look out for long queues, if you require a doctor, if there are any left around.


Till again.



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