Varadkar’s Vassals

June 28, 2017

WE NEED TO LEAVE THE EU

In his book, p97  “And The Weak Suffer What They Must” Yanis Varoufakis gives praise to the following rather prescient observation of Margaret Thatcher, a politician he has next to nothing in common with:

“But if I were (playfully considering the notion if she were governor of the European Central Bank), there would be no European Central Bank accountable to no one, least of all to national parliament’s. Because under that central bank there will be no democracy, (and the central bank will be) taking powers from every single parliament and be able to have a single currency and a monetary policy and an interest rate policy that takes away from us all political powers.

Those words have borne true for politicians in Ireland and across Europe. Consider that new phrase ‘Fiscal Space’ that arrived on our shores only a few years ago following a visit from the troika. This means Europe dictates budgetary limits it has set for us, our politicians cannot borrow on behalf of the state to invest in the public housing infrastructure the state requires to combat homelessness.

With Ireland €200 bn in debt, political roles reduced to being the obedient and compliant messengers of European dictats  Ireland’s politicians have struggled to pretend otherwise. They pretend to have the power to end our housing crisis, to build our hospitals to build the infrastructure a growing population requires.

Instead of large-scale municipal housing projects, hapless “Help to Buy Schemes” for first time buyers has had the opposite effect of increasing prices for first time buyers.

Government  encouragement of the private sector to take the lead in increasing public housing stock on the scale required to end homelessness and extortionate rent, has failed. But politicians wishing to pretend they have the power still pretend they can respond to the mandate of the electorate that gave them their vote.

Instead Ireland is run managed by our banks and anonymous unelected officials from the European Central Bank and the European Commission more secretively by Ireland’s Economic Management Committee. Not even the European parliament as a toothless legislator can change that.

Investment in capital infrastructure in education, research and in health is bottoming out to make further burdening of the electorate of the present and the future, look dismal in the extreme.

In such a situation you would imagine that debate on whether it is wise that we should remain in the EU or exit alongside the UK would be worthwhile. but you would be wrong if you did.

We appear to have a severe case of Stockholm syndrome ..” is a condition that causes hostages to develop a psychological alliance with their captors as  survival strategy during captivity”. However this analogy is not completely fair as both our European captors and our politicians appeal to our sense of well-being promising a return to the good days prior to what Lisa Hand described as:

It was like a physical punch in the gut. Outside on Merrion Square, frozen snow glittered on the streets. But it was nothing compared to the icy chill which hung in the air of the press centre in Government Buildings on the desolate night of Sunday, November 28, 2010, as the packed room watched a group of strangers from the IMF, EU and ECB settle into seats just vacated by the Taoiseach and two cabinet ministers.

This Troika was our new government now – unelected, unwanted and absolutely indispensable. Three Kings bearing a bitter gift of €85bn for a broken nation teetering on the edge of the precipice. Thirty pieces of silver in exchange for our hard-won, precious sovereignty.”

http://www.independent.ie/lifestyle/the-week-ireland-gave-up-its-sovereignty-29796376.html

On many levels we inherit an erstwhile disastrous  membership of the EU: political disempowerment above coupled with an unelected an unaccountable European Commission, unconscionable bailout that burdened Ireland with losses that should have been shared by European banks, billions that have been lost through our loss of fishing grounds, the prospect of Brexit causing losses of €5bn annually of agri business and further massive losses as yet unquantified, disastrous and deteriorating public services that presently buckle on the point of serious short fall.

The real problem with the euro is that it doesn’t have a system of circulating surpluses and deficits among member states as exists in the US under the FED. Instead the broken economies or Europe are meant to recover through a system of bailout and austerity in which every penny lost has to be returned from borrower to lender. This puts severe stress on already broken economies such as Greece.

Devaluation for member states as a system of self-regulation is not possible so states already burdened by bailouts are further burdened by austerity.

This is a loop that cannot be broken except by the breakup of the euro. Perhaps this fact alone is at the heart of Brexit many politicians in the UK perhaps having foreknowledge of the imminent breakup of the euro itself.

Negotiations over Brexit not only flag the exit of the UK from the single market the euro represents, but also flag the very survival of a euro severely challenged as it will be by Brexit.

Notwithstanding a budget deficit that is currently under control though weighed down by over €200bn of public and private debt, a serious housing crisis disastrously managed by NAMA (who’ve alarmingly sold off housing stock to the lowest bidder rather than contributing to the supply of housing in a broken residential housing market); Ireland INC finds itself inflated by rising housing prices;  a return to a bubble economy supported by fragile banks facing what could be a greater threat to its economy than the meltdown of 2010, Brexit.

In place of flooding propaganda from both media and political sources denouncing Brexit with an arrogance that grows by the day, there should be an informed debate on whether we too should exit the EU.

The EU does not work anymore. Its unelected and unaccountable  bureaucracy has forced member governments into submission to a euro system that is proving disastrous for member countries leading them down to a path to ruin.

Without economic shock absorbers see below it has failed to deal with the financial losses of meltdown inherited through the 2008 Wall St crash and has sought to recover by a system of bailouts kicking the can into the future rather than healing the wounds that brought periphery nations such as Ireland into economic collapse.

Following 2008 Nevada in the USA went into financial collapse. Though a system of deficits and surpluses administered by the FED surpluses of states were channeled to this deficit state along with measures to rein in its banks and put the state back on sure-footing.

No such system exists in the EU. Instead vast losses were piled on the shoulders of deficit states and their taxpayers burdened with these losses through bailouts growing the gulf between rich surplus nations and deficit nations.

The policy of returning member states to economic growth has failed in Europe. Further centralisation of Europe can only mean less democracy for member states and increasing authoritarianism for member states.

EU  has drifted far from its original aspirations.

As political accountability has lessened the gulf has grown between the disenfranchised poor, the people, and their politically disempowered representatives.

Can things get worse? Sure they can:

https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/euro/european-commission/

“Once Draghi stops buying government debt, we may see a meltdown in the euro altogether.

The ECB wrote: “It is to be expected that significant developments on both the global and the European level will increase the risks posed by clearing systems.”

ECB is moving financial clearing houses from London to Paris.

Into this vacuum has stepped the far right introducing the nightmare scenario of the rise of extremism growing by the day awakening memories of Germany in the twenties and the consequences of this for democracy. This is engendered by a Europe run by a faceless bureaucracy, a European Commission that is held unaccountable to political movement by the people, a toothless European parliament that cannot legislate for the people.

Meanwhile 2 more banks in Italy have failed “Two more Italian banks failed over the weekend– Banco Popolare di Vicenza and Veneto Banca.Banks in Italy”. It will take €17bn of taxpayers money to bail them out.

This will come close to emptying the pockets of taxpayers but the story only begins here and offside hidden in the wings are a vast number of other banks in Italy struggling under the financial losses hidden away since the 2008 financial collapse tsunami that swept across Europe in 2010 until now.

Next move will be to raid depositors money with bail in as happened in Cyprus.

Varadkar’s  statement that his door is always open to the UK to talk not of Ireland also exiting with Brexit but of UK remaining in the EU shows a  contempt for the will of the British electorate who’ve voted Brexit.

Ireland does not think twice of holding referendum after referendum until the people are lied to enough to ensure their compliance with the will of compliant and obedient politicians.

I’m sure his door is always open is persuaded by his failure to attract any interest from NI politicians in Irish government calls for a United Ireland while remaining in Europe. Surely one of Fine Gael’s greatest political conceits.

Arlene Foster has just done a billion sterling deal with the Tories in the UK in return for minority support of Tory government. Her DUP party campaigned in favour of Brexit.

It will be interesting to see how much of this money will go towards the provisioning of border controls between NI and southern Ireland when Brexit comes about. For sure this money is meant to cushion and shock absorb NI from the effects of Brexit especially in its relationship to Southern Ireland.

Interestingly no similar commitment has been forthcoming from the European Commission as a buffer support of southern Ireland. Nor have Irish politicians been engaged in any public lobbying of the European Commission other than the acknowledgement of the empty acknowledgement Ireland is a special case!

In regard to the provision of housing, health and education we have to question whether democracy in Ireland exists anymore.

See this def:

” :  government by the people; especially :  rule of the majority 

:  a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections

Varadkar’s government’s failure to make good their promise to build social housing only 10% of which were built last year from a ridiculously low base shows political impotence.

Varadkar is wedded to further erosion of democracy and would not think twice of re-running any Irish referendum if it didn’t suit his preferred outcome. This is implied in his door open statement.

Varadkar’s future for Ireland is a Vassal Irish state with powerless politicians paid exorbitantly to groom Irish voters to accept all medicine from Europe as it plunges Ireland into deepening austerity.

The future of such politicians comes with the tantalising opportunity to progress to political positions in any number of the vast network of Brussels based European institutions who run our lives without accountability or democratic input.

The forces ranged against rational debate of an Ireland IExit proposition in support of Brexit are extensive and wide-ranging. Interest groups against Brexit range from politicians to public servants, to farmers, to the financial sector, all of whom are beneficiaries of the current status quo inside the EU.

Government budgetary considerations trundle along on receipts from a ruinous property sector, Corporation tax receipts that can collapse at a moments  notice under adverse pressures from Donald Trump to Donald Tusk, President of the European Council.

Not leaving out the security costs of a hard Brexit border and the extra tariffs charged against our exports to the UK under Brexit. Perhaps large-scale emigration endured over previous years will return to take pressure off our public services.

We should be talking to the European Commission on the question of monetary flows from the European Central Bank into Ireland from surplus EU members to help us shock absorb Brexit. We’re not.

The fact that instead the European Commission, as it did for our bailout forced us to take it on the chin for Europe without its support on burden sharing, will leave this country to fend for itself under Brexit, should be sufficient reason for our politicians to want out of the EU.

We do indeed exist in a financial bubble many on this island benefit from. Many wish this party to continue. Storm clouds are gathering however and all bubbles are easily burst. Looks like Ireland could be one of those bubbles that Brexit bursts first.

This will happen in spite of Varadkar’s vassals putting their heads in the sand and hoping for a good outcome for Ireland under Brexit.

This will happen in spite of efforts by Mario Draghi, President of the ECB or Donald Tusk President of the European Council cementing the relationship of the European Commission and Ireland by perhaps making Enda Kenny our ex Taoiseach Tusk’s successor while embarrassingly our state crumbles under the effects of Brexit.

On such an imaginative digression, I thank you for reading the above.

 

till again

 

http://www.telegraph.co.uk/news/2017/06/26/arlene-foster-meet-theresa-may-finalise-dup-deal-prop-tory-minority/

https://www.merriam-webster.com/dictionary/democracy

Eating Their Young

November 27, 2016

During the week we heard rejoicing on the airwaves http://www.thejournal.ie/central-bank-mortgage-rules-2-3095784-Nov2016/

“It was announced this afternoon that a first-time buyer will now only need a deposit worth 10% of a property, regardless of its price. However, the 20% deposit rule will continue to apply to second-time and subsequent buyers.housing-crisis-cartoon2-598x480

The 3.5 times ceiling on the loan to income (LTI) ratio remains. Requirements for buy to let borrowers and the exemptions for negative equity mortgage borrowers from the measures also remain unchanged.”

Rejoicing continued with claims that the above rule would stimulate the construction sector to build more new builds thus rapidly dealing with the homelessness crisis.

Nothing could be further from the truth. The truth is housing has become unaffordable for the average industrial wage and is quickly getting beyond the reach of young people in high paying jobs.

Provision for a large municipal building programme that will end the crisis has been avoided at all costs.

Instead media is filled with images of smiling Enda proclaiming a dynamic, progressive and wealthy economy with a solution to the housing crisis brought about by Simon Coveney. No solution and Kenny will disappear from the stage some say the sooner the better.

Teachers went on strike to protect young workers in their profession forced to take a large cut in their wages in spite of rising rents and property costs. Hospitals are at their wit’s end with numbers on hospital trolleys about to reach all time records if winter flu hits see statistics here http://health.gov.ie/statistics/ Our rivers are polluted with drinking water requiring massive investment http://www.epa.ie/water/wm/rivers/results/

There is massive propaganda in the media with attempts to manage public sector pay increases expected by the unions in the wake of Ireland  seeing  its return to prosperity. Most do not see this. Widespread efforts to smother increases in public sector pay follow along the lines of warnings that our continued prosperity is on a knife-edge and such demands could lead our economy to collapse again.

The implied accusation is that public sector pay increases led to our economic collapse in the first place not wanton speculation in the property market promoted by the 1% of speculators and banks abetted by government who stoked the property market to line their pockets at the expense of workers.

The ridiculous black is white mantra that increasing house prices would encourage builders to build more houses will soon be seen to be the deception it is. Developers and bankers will not build and lend into projects priced beyond what the market can afford to pay.

It’s possible our politicians are so deceived they themselves are the greatest victims of their own delusions. There is no fungible relationship between Simon Coveney’s basket of intents and policies to bring about the construction of the numbers of houses and the real world.

The real world is very simple though to have any insight into its true nature will bring a response that such views are facile, fatuous, facetious and fail to grasp the complexity and scale of the problems of the real world. Bernie Madoff used such arguments to scoff at his critics before he was sent to prison.

Construction of public housing needs to be done on a vast scale on a Municipal basis. The price of housing needs to be severely brought lower not higher vis-a-vis Simon Coveney’s policies.

This is not happening because a small dictatorial elite of FG/FF headed by the smiling wannabe dictator Enda Kenny continue to fan the flames of prosperity for the 1% against the 99%.

They do not want house prices to fall.

Present relaxation of rules will fan property crises in the attempt to continue the bubble they fear will pop because not enough young first time buyers can afford to raise the finance for Madoff property pyramid schemes.

They want rich investors in Irish property many of whom are TD’s with large rental property portfolio investments or vulture funds pricing out Irish buyers continue to make large profits from artificially induced shortages.

For them the agenda is to manipulate the media and public opinion to the view what is best for the banks and the 1% is best for all.

It isn’t.

 

till again…..

 

 

Pariah Apple Pie

September 1, 2016

cartoon-business-man-being-hit-with-extra-taxes-and-carrying-a-money-bag-by-ron-leishman-1322Just listened to Tim Cook, Apple CEO, on Morning Ireland state: while he is in favour of changing and simplifying the tax laws, any retroactive finding against Apple’s tax affairs is politically motivated and unfair.

We’ll look at European Competition Rules shortly to agree or not both Ireland and Apple were in breach of the ruling to provide illegal state aid to Apple by way of a sweet tax deal.

Firstly, by way of an intro lets put away the frequent political canard that FDI investment in Ireland is volatile and at the first whiff of danger Apple and its fellow MNC’s will flee our shores.

We have a relatively stable political climate in Ireland. The island itself is easily defended and safer from foreign terrorists than other countries in Europe. Our climate is cool, conducive to the setup and maintenance of large data centres.

Most MNC’s have worldwide exports and we have airlines. Our population is relatively well-educated though on its present course it is falling behind. Relations between Ireland and parent MNC countries is good.

But Tim Cooke knows the cat is out of the bag. Ireland through its IFSC services has been operating as a tax haven for years offering off the shelf deals with a nod and wink to Enterprise Ireland and FDI has flooded to Ireland to avail of these tax breaks.

Such tax breaks are morally corrupt and illegal and represent unfair advantage given to companies operating in Ireland such as Apple.

I will not delve into but instead point out there is a need to examine the constitutionality of the tax laws that operate in this state Provisional Collection of Taxes Act 1927 (‘the 1927 Act’) and the Irish Constitution. For example. the following paper:

http://www.taxandlegal.ie/ITRSept2009.pdf examines the legality of retrospective collection of taxes eg property taxes.

Be that as it may the sweet deal provided to Apple and how it fundamentally assists in the avoidance of fair taxes locally and for example in MNC parent countries eg USA needs examination as to whether such practices a=) contravene the rights to fair collection of taxes of the Irish people  as set out in the Irish Constitution b=) contravene the constitutional rights of other taxpayers in other jurisdictions.

This matter has wider implications than those raised by European Competition Authority rules. We are considering here no taxes for the 1% and taxes for the 99%.

The great edifice of international tax rules has been carefully scaffolded  through armies of lobbyists and legal eagles to carefully construct non-payment of taxes by MNC’s.

This scaffolding has been built and funded mainly by those seeking unfair advantage and profitable benefit for the financial interests  they represent. This does not include the interests of taxpayers.

Readers of this blog will know my position supporting IRexit in support of Brexit( see last blog ) and I fundamentally disagree with the Orwellian powers given to TFEU the Treaty on the Functioning of the Union eg:

“Article 3 1.The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal market;

(c) monetary policy for the Member States whose currency is the euro;

(d) the conservation of marine biological resources under the common fisheries policy;

(e) common commercial policy”

http://ec.europa.eu/competition/antitrust/legislation/handbook_vol_1_en.pdf

Realising how little our politicians know about managing our finances under such rules perhaps aided by our so-called economic management committee excluding such matters from both political and public perusal  it comes as no surprise politicians deliberating on our response to findings against Ireland and Apple should want to defer decision until this coming Friday to give themselves time to inform themselves.

It’s surprising Michael Noonan should wish to squander public money in appealing this long deferred ruling by the European Commission against Ireland. Its surprising compared to the paralysed silence of Irish politicians in objecting to the odious terms of our financial bailout. The IMF had more objection to the terms of our bailout than local politicians. Its surprising given the support of the Irish government for Europe.

But then considering the incompetence involved in such an ill judged decision its of no surprise. The decision will consolidate Ireland’s reputation an an international tax haven pariah.

So I could take the view this is just another example of Michael Noonan’s compliant and obedient servility to the rules of gross incompetent obedience to demands made by shadowy financial sector powers in handling our financial affairs.

On the other hand, I might take the view that the Irish government is slowly waking up to the fact that it is in the belly of a boa constrictor when it comes to Europe. Noonan’s ardour for Europe is dampening somewhat.

See article 3.1.

  1. Europe is flexing its muscle establishing it alone has the right to establish european wide competition rules.
  2. Europe can dictate Ireland’s monetary policy.
  3. Conservation of marine resources…we know what we’ve lost there
  4. Common commercial policy (do the bidding of the large group of financial lobbyists that control the EU)

Basically the sooner Minister Noonan goes the better. His bailout negotiations were a dismal failure culminating in usurious and uxorious repayment terms to Ireland. Only mitigated when it was noticed terms given to Ireland were a lot worse than those negotiated with Portugal and Greece.

Now with the latest Apple debacle he wants to challenge using taxpayers money the finding of approx €13bn underpayment in tax to Ireland in a sweetheart deal that fleeces taxpayers across the world.

http://europa.eu/rapid/press-release_IP-16-2923_en.htm

Mr Noonan instead of bowing to the inevitable is bowing to the dictates of an international tax pariah system fleecing taxpayers across the world, of which he has made the Irish government a lynchpin and tax haven cog.

He has made this country look ridiculous and ludicrous in his efforts to return a potential windfall of €19bn to Apple.

Think of this. Given the level of control of our economy in 3.1 above do we need our large Dáil with all its deputies and the cost of their pensions and salaries with powers given to them that are but toothless window dressing?

We’ve had enough of fiscal rules eg extortionate bailout;  Irish Water served up with homelessness;  extortionate rent serfdom to our young people.

Now the new mission of safe return of €19bn of Irish tax payers money to Apple?

Please support IRexit.

 

Postscript

The Dáil is due to debate the Commission ruling on Apple today 07.09.16. A defence bulwark in support of appealing the decision is the claim that the Revenue deal on Apple was not selective, other companies could avail of this.

Lets leave aside the investigation if this was/is true for other companies operating in Ireland, surely the whole point of the Commission ruling from a competition perspective is that inter alia Ireland being a member of the EU with EU law taking precedent over Ireland’s laws, we are in breach of European Competition rules that affect taxation policy.

It’s ludicrous to propose as a defence the right of Ireland as a sovereign nation to invite companies such as Apple into Ireland with sweetheart deals that put other European nations at a competitive disadvantage.

Over here, over here, don’t waste your tax dollars in other European countries we can recycle your profits so you pay no taxes due anywhere!! If the government doesn’t like these rules it needs to leave the EU and support IRexit as I do.

Otherwise, stop wasting Irish tax revenues on a Fool’s errand that will make us the laughing stock of the world, put us in direct conflict with a ruling supported by 28 EU commissioners and the EU itself. Its asking that we get rubber stamped as a tax haven, a Corporation Tax Global Recycling dump,  to help MNC’s  avoid fair taxes owed to the taxpayers of the world who need healthcare and education politicians are failing to provide.

 

till again

Ireland was the only member state to hold referendums on The Treaty eventually passed as Treaty of Lisbon in October 2009. Already post Brexit there are calls for greater political union in Europe I’m guessing aimed at removal of Article 50 removing the means for member states to withdraw:

http://www.cnbc.com/2016/06/28/the-brexit-and-article-50-cnbc-explains.html

https://en.wikipedia.org/wiki/Twenty-eighth_Amendment_of_the_Constitution_of_Ireland

Given the appalling way Ireland was saddled with no debt write down or debt sharing of Ireland’s bill for financial collapse carrying 42% of European financial losses that otherwise would have been carried by German and French banks the case for putting a referendum on membership of the EU has become compelling.

Added to the losses Ireland will incur through Brexit and added to the negative stance within Europe to Ireland’s corporation tax and arguments below, the Irish deserve a referendum to vote on their future within the future imposed on them by membership of the EU.

Ireland should also have a democratic say in any negotiations between the EU and the UK on Ireland’s future relationship re trade and borders. This is another compelling reason for providing a referendum on IREXIT.

Sinister intervention in Ireland by the European Commission on Water Charges forcing them upon the Irish electorate in spite of their declared wishes is an example of an erosion of democratic control of Irish affairs by unelected bureaucrats in the EU.

It’s not precisely the directive to have a certain water policy that galls but the audacious intervention in Irish sovereign taxation affairs that directs us to have separate water charges with a private, commercial monopoly running it.

How we raise the money through taxation should be a matter for Ireland alone. Water charges per se should not be part of the remit of the EU.

There is also the fear of undue influence by private commercial interests in the affairs of the EU wishing to dismantle public services to allow private commercial interests to loot public services for commercial gain.

This is not what membership of the EU was meant to be.

That the Irish derogation for water charges no longer applies is a result of Minister for the Environment  Alan Kelly’s refusal to ask for a derogation:

“In accordance with Article 9.4 of the Water Framework Directive our exemption is embedded in the 2008 River Basin Management Plan. Any renewal or cancellation of the exemption is done in the next 7 year RBMP. And it is the Minister for the Environment who assembles and submits this plan.

This 2015 River Basin Management Plan is due on be handed into Brussels by New Years Day. Both the Irish government and the European Commission are expecting that Minister Kelly will not renew the exemption and will instead include domestic water charging as part of Ireland’s strategy.”

Kelly built no houses for the homeless and gave away our water to private, commercial interests. Enough said of compliance, obedience and incompetence as certain politicians hand over national assets without thought for our national interests or the good of the people.

Meanwhile Enda Kenny is back from his trip to the UK where he successfully alienated the full Brexit movement’s future government by his interference in UK sovereign affairs.

How come Kenny was not asked to walk the plank after his election results is another question. A weak, Irish zombie government of those rejected at the ballot box is not helping in these turbulent times.

He was quoted by one remain politician in the Johnathan Dimbleby “Great Debate” that Kenny said border controls would have to be introduced if Brexit won as if the Irish government would insist on them. Fearful images of Armageddon, barbed wire and Berlin Walls were part of his politics of fear.

Only the most limited if any border controls should be introduced.

 

EU Say Ireland’s Domestic Water Charge Exemption Is Safe, Unless Alan Kelly Gives It Away On January 1st

Update: http://www.irishtimes.com/news/politics/eu-to-ireland-you-cannot-go-back-on-water-charges-1.2701502

Can you figure out how Scotland reconciles its wishes for independence with membership of the EU. They already have more independence and will have more independence in their relationship with the UK than they would ever get disappearing down the rabbit hole of the EU.

This blog celebrates the restoration of the democratic wishes of the British people that have arguably saved democracy itself from extinction. Congratulations to all Brexit campaigners who fought so well against so overwhelming odds.

Congrats to the UK on managing to drop the value of sterling. This will have a very positive effect on exports and reduce imports and should yield a healthy balance of payments result for the UK.

https://en.wikipedia.org/wiki/Black_swan_theory

“The theory was developed by Nassim Nicholas Taleb to explain:

  1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
  2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
  3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.”

While this blog campaigned virtually alone in Ireland for Brexit, pollsters and pundits and politicians got it wrong.

Not foreseeing the consequence of Brexit many in the Brexit camp have experienced a state of Black Swan paralysis and currently flounder in limbo unable to navigate a future path to address the issues Brexit has posed. At least that’s what Minister Noonan would have you believe disdainfully scorning Brexit campaigners for lack of future planning.

Not so. The description however does appear to describe well the remains of Noonan’s position on these matters.

Welcoming the positive affirmation of democracy that is in Brexit this blog will address these issues and point a way forward at least on 2 fronts.

Firstly, the UK will go through a process of disengagement with the EU while at the same time arrogating to itself responsibilities in areas previously controlled by the EU. This will require institutional changes and the inception and setting up within UK of parallel lines of responsibility within its own institutions of government and this may take some time to set in place.

It will have to renegotiate its fishery policy with the EU insisting that its borders be respected.

Independent self-government managing its own affairs responding to its own needs and mindful of the needs of the world at large is well within the remit and capabilities of the British people and its representative parliamentary democracy.

The UK needs time to apply its creative energies to this task.

Secondly, given the sad outcome of 2 great performances by both the northern and southern Irish soccer teams at European level our thoughts should wonder at what could be achieved by one single Irish team.

With Brexit our thoughts should be with joining northern Ireland as a single commonwealth entity with equal if not more independent stance than currently enjoyed by both Wales and Scotland. For this we need IRexit.

The sad state of political leadership in southern Ireland is missing the brilliant contribution that could be made by outstanding politicians such as Sammy Wilson or Teresa Villiers in the north.

Southern Ireland cannot afford to be a member of a failing EU with its largest trading partner and neighbour outside the EU; this combined with the fact our island of common interest is split in two. This could be an opportunity of ending “never the twain can meet”.

The second front upon which changes need to be made should be focused on the EU rather than the UK or Ireland.

Consider the following on the EU commission:

“The Commission remains politically answerable to Parliament, which has the power to dismiss it by adopting a motion of censure. The Commission attends all the sessions of Parliament, where it must clarify and justify its policies. It also replies regularly to written and oral questions posed by Members of Parliament.”(1)

It is noted here that a session of the European parliament is due to be convened to discuss all issues relating to Brexit.

This is much overdue following the emergence from the shadows of Angela Merkel announcing a summit of leaders including only France and Italy following Brexit. Leadership by proxy of Europe by Angela Merkel has emerged more and more into visible light since the financial collapse of southern, peripheral European states such as Greece, Portugal and also Ireland.

To observers such as yours truly this only adds to the belief that the EU is government by proxy of Europe by Germany. The implication for dodgy banks in Germany, France and especially Italy with debt to GDP hovering at 120% must have been high on the list of concerns.

Members of the European parliament apart from ex member Nigel Farage are generally a disenfrancised lot with no powers other than to rubber stamp what unelected and mysteriously lobbied and influenced members of the EU Commission allow them to rubber stamp.

But here is an opportunity for the members of the European parliament to censure the mishandling of Brexit by the commission and dismiss the EU commission.

Not a likely scenario but one I advocate. A more likely scenario is the highly paid MEP’s will churlishly say little if nothing and do less.

The European Commission has been woefully remiss in its treatment of David Cameron in its refusal to allow independent derogation for  UK comply with  massively deficient policies on emigration.

The EU commission has woefully mishandled the refugee crisis. It has been compromised by Germany’s go-it-alone policy.

It has allowed geopolitical concerns particularly in the alliance of inner core members such as Germany, France and Italy to exert undemocratic control over the now compromised independence of the European parliament.

It has sat by and allowed the banks of Germany and France to dictate undemocratic terms to the people of Greece.

It has allowed itself to be the pawn of external forces that have lobbied and compromised its independence challenging its role as a policy maker in Europe.

It has failed to shape policies to rebalance Europe and instead has sharpened the divide between northern and southern Europe.

It has had no effect on independent European monetary policy that instead through the European Central Bank followed a go-it-alone policy arguably in favour of monetary policies promoted by Germany looting peripheral members of the EMU.

“New EU rules on economic and financial governance help to Union resources clean up and strengthen the banking sector.”(1)

These rules show how compromised the European Commission is with lobby groups and so-called experts from the banking sector, Goldman Sach’s, Morgan Stanley, influencing and setting policy: those meant to be the subject of regulation choosing their own regulations.

The EU commission has become a toxic brake on European progress and become the pawn of shadowy lobby groups.

The EU commission is not an elected and democratic body but is instead leading member states along the path of totalitarian policies reminiscent of the previous USSR.

Dismissal of the EU commission pending its reform should be high on the agenda of next meeting of the European parliament. This is not likely to happen with even less likelihood of reform that will challenge special interest groups.

A little word on how the European Commission and the ECB have failed to help us in solving our housing crisis. Instead the following scenario is being played out across Europe in countries such as Ireland.

“The financial raiding of the American middle class is moving full steam ahead.  The ridiculous structure of the banking bailouts and artificially low-interest rates caused hot money from banks and big investors to crowd out regular families in the housing market.  Now here we are 7 years after the official conclusion of the Great Recession and regular American families are financially struggling while banks and big investors thrive.  Today 11 million Americans spend half of their income on rent.  Another 21.3 million spent over 30 percent of their income on rent.  With millions of properties being bought by investors since the Great Recession hit, all that has happened is a mega transfer of wealth.  You don’t build equity by renting but many people are simply priced out from buying a home.”(3)

In Ireland the European Commission has done nothing to support Ireland’s growing housing crisis.

It silently supports massive Quantitative Easing QE by the European Central Bank which has led to depreciation of the euro against other currencies.

With negative interest rates this has contributed to a global currency crisis increasingly pillaging the assets of savers and public services though austerity.

It has turned a blind eye to the odious terms imposed on Greece for its bailout while silently supporting the Highest EU debts as a proportion of GDP (2014 Q4)(4) debt levels of Greece, Italy, Portugal, Ireland, Cyprus and Belgium. Italy at 120% debt to GDP of particular interest.European-Debt-to-GDP-Ratios-Oct-2013

 

EU commission needs to be dismissed.

Its management of monetary matters left to the ECB is a failure and its consequences grow more toxic by the day.

 

 

A monetary backdrop to the work of the EU commission is a global fiat currency inflated to kingdom come by the Central Banks through Quantitative Easing.

A return to a gold standard or a similar bitcoin related inter currency standard to stabilise markets and give rise to fair savings and investment in R&D is required.

This is outside the remit of the European Commission and beyond the means of the ECB but its policies favour the maintenance and continuance of this failing currency system.

In a casino driven financial economy that is a bar to further human progress with the European Commission fronting a European banking system that has become the bad bank of Wall Street and the Federal Reserve;  austerity imposed on the people of Europe ;  funding the rich 1% with further giveaways through Draghi’s Quantitative Easing, its time the EU itself considered its future with debt levels described by above graph.

But it would appear through lobby groups and shadowy interests pulling the strings of the EU commission both in the case of banking regulations and the above Irish Water debacle, that the EU itself is fixed upon the path of maintaining the current system of looting and pillaging the middle classes.

The concept of private ownership ownership itself as it was in the USSR may become a distant memory for those who remain in the EU…

Congrats to Brexit saving democracy itself from extinction under the above.

 

    1. How EU Works:  https://eeas.europa.eu/delegations/singapore/documents/more_info/eu_publications/how_the_european_union_works_en.pdf
    2. http://www.bloomberg.com/news/videos/2016-06-27/alan-greenspan-u-k-brexit-a-terrible-mistake
    3. http://www.mybudget360.com/share-of-income-spent-on-rent-at-record-high-11-million-spend-half-income-on-rent/
    4. http://www.telegraph.co.uk/news/worldnews/europe/greece/11705720/European-debt-crisis-Its-not-just-Greece-thats-drowning-in-debt.html

 

 

till again…

This blog has argued that the Irish Central Bank with its policies underwritten by the ECB has been the single most cause of our housing and homelessness crisis. Shortages have been engineered by the Central Bank to prop up property prices and to ensure repayments of mortgages without the added burden of negative equity.
vulture_funds__fiestoforo

To prop up this bubble in housing and property, loan to value relationships that includes extortionate rent rates, rich property developer stakeholders with large investment portfolios are assured of a good return, their repayments on their own outstanding loans, made ‘safer’. 

The consequence of this policy is that the young cannot afford housing as they are forced to pay Sheriff of Nottingham rents. 

In an interesting contribution to this debate, Master of the High Court Edmund Honahan, has entered the fray. Tackling Alan Kelly’s misinformed and ill-judged view that the constitutional protection provided for property ownership is the leading cause of our crisis of homelessness.

Kelly’s views on this matter lay bare the lack of intellectual probity and competence available to Irish citizens at the political level in dealing with our crisis.

Our constitution on this matter does not require change. It is clear and well worded and provides adequate safety measures to ensure the public good should not be compromised in favour of private interests.

 

“2 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.

 

2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”

 

Honahan suggests the state act to acquire large property portfolios now in private hands:
“If the owners of these refuse to sell, acquisition can be by compulsory purchase with full compensation assessed by an arbitrator”.

Honahan does not visit  the scandal of NAMA selling Irish housing stock at knock down prices to vulture funds at a vast cost to the Irish taxpayer; the further cost being the hidden tax/high rents these vulture funds can impose on the market place.

Part 11

Also argued on this blog is the view Ireland should strongly entertain leaving the EU along with Brexit on a journey to create a fairer national and global economy, ending homelessness and the usury of financialisation that is becoming increasingly toxic as it brings us closer to global market collapse.

Without reform of the global financial system, war and the current refugee crisis in Europe and further turmoil in Africa are all inevitable. The euro is contributing to this crisis as it follows the path of support for austerity rather than reining in the profligate markets that favour the 1%.

In Europe a Scandinavian and UK commitment to a trade agreement, with its own members acting with the EU as partner, alongside reform of the financial system, at its best is a better trade-off than the imminent possibility and consequence of global financial collapse. Brexit should lead to such new trade agreements and partnerships.

Meanwhile in Ireland repercussions of our own bailout and its repayment burden with Ireland the second most indebted country in the world are felt everywhere. It is leading to farcical economics.

Credit unions have offered up to €8bn to invest in social housing. Captured by financial interests and increasingly stripped of its power to act, the Oireachtas currently unable to form a government, has become at odds with the needs of Irish people sold out to financial interests.

Investment in social housing is seen to be at odds with the for profit vulture funds and the banking requirements of our creditors.

The credit unions have been ignored. Nothing is being built.

No action on above, no action on investment of our pension funds, other than to pillage to spend on the propping up of a failed Irish bailout. There is a frozen lack of ideas and even less action from politicians only concerned with their pension rights and salaries protected against the cuts in salaries faced by young teachers and young gardai.

There is no cross party support for a large investment programme as provided by other Irish governments in the earlier part of this century.

Perhaps too many members of the Oireachtas wealthy on the result of their property investments, do not wish to compromise same.

Part 111

Today young people earn less than their parents with prospect of inferior standard of living going forward while living expenses have skyrocketed. Young teachers, gardai and a huge range of public servants have little to no chance of owning a home in their lifetime.

Property has been acquired by the financial sector as a new speculative arm with ever more complicated arrangements ballooning debt and selling it as lure to trap the unwary.

Risky mortgages based on rising property prices were the keystone of a new speculative gamblers economy offering risky assets with prospect of fantastic returns to investors large and small including home owners.

It was an Enron scam. Those in early spread the word, those in last paid the piper of financial collapse, negative equity.

A fairer system of global taxation ending the casino manipulation and corruption inside the global financial system, is a long due reform of 1% interests outweighing those of the 99%.

In Ireland recent years have led to the current political stalemate consequent on support of the 1%.

The policy that ensure the 1% exploit the 99% is a policy fed by central bank manipulation globally; both in Europe and in Ireland it is a policy that is bound to fail.

Not only are the 1% fuelled by bailout but according to Sunday Business, March 27 “Elite syndicate in Revenue deal for ‘aggressive’ tax avoidance’. Revenue will not publish their names as part of a deal to make them pay up. Ireland’s 1% get special tax avoidance favours too.

This is the tip of the iceberg.

“Mossack Fonseca is not a household name, but the Panamanian law firm has long been well-known to the global financial and political elite, and thanks to a massive 2.6 terabyte leak of its confidential papers to the International Consortium of Investigative Journalists it’s about to become much better known. A huge team of hundreds of journalists is poring over the documents they are calling the Panama Papers.

The firm’s operations are diverse and international in scope, but they originate in a single speciality — helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it’s expanded its interests outside of Panama to include over 40 offices worldwide, helping a global client base to work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world.”(2)

Hopefully names will be published and unlike our Revenue Commissioners, journalists will reveal all.

Lastly, on a wider note, Greece has not gone away. On a wikileaks analysis Paul Mason has speculated the IMF is contemplating a credit event for Greece this coming July around the time of Brexit when the IMF may walk away from a restructuring of the circa €300bn of debt held by the ECB on Greece. See 4.

 

till again

 

 

 

  1. https://en.wikipedia.org/wiki/Deregulation
  2. http://www.vox.com/2016/4/3/11356326/panama-papers
  3. https://www.constitution.ie/Documents/Bhunreacht_na_hEireann_web.pdf (Article 43)
  4. https://medium.com/mosquito-ridge/imf-plots-new-credit-event-for-greece-534b4b300318#.f7gyaaw58

 

 

 

 

 

Ireland’s Big Lie

March 20, 2016

Many in Ireland are calling for government intervention in the housing and homelessness crisis. More social and private housing needs to be built to end waiting lists. Some argue the crisis will get a lot worse with upwards of 70000 in danger of losing their homes as vulture funds up their rents further while they continue their profiteering rampage.

Tunnel of Love/Lover's Leap.

Tunnel of Love/Lover’s Leap.

The Construction Federation of Ireland have said(1):

“The market price of many homes throughout the country is still well below the all-in construction cost. In a report commissioned by the IHBA from Walsh Associates, Construction Cost Consultants in 2014, the construction cost of a 3 bedroomed semi-detached house of 110 sqm is calculated at €225,961, in addition to site costs plus VAT at 13.5%.  According to the Daft House Price Report 2015 published today, the average asking price for houses in Carlow is €140,536, in Offaly it’s €138,247, while in Westmeath the average asking price is €145,804. Clearly, as long as sales prices for these houses are below replacement cost, the market will not support significant increases in the construction of new homes. As long as this situation prevails, little to no new housing will be built in these areas.

“The IHBA agrees that more housing is needed to meet the national demand.  However it is up to all stakeholders including government, banking, regulatory and development sectors to ensure that a viable construction environment is supported to ensure that this critical objective can be achieved.”

(2)”The Irish League of Credit Unions has offered the Government a €5 billion fund, which could be kept off the State’s official borrowing figures, to build thousands of homes over the next six years.

The league, which represents 437 credit unions and has savings in excess of €11 billion and total assets of more than €13 billion, has told the Government it currently has “surplus” funds of up to €8 billion.”

Stakeholders are asking that government take the reins and join the dots to lead and to create a much-needed housing programme to end the current crisis.

Yet the offer from the credit unions has been with government since last October with little or no response. Neither have Fine Gael Labour in their election manifestos warmed to the advance of the credit unions with election commitments to invest.

Each RTE programme, each media item on homelessness dwells on the thorny subject of last of investment, lack of planning, too great a government tax take while blame is handed from one agency to the other with no one seeing the wood from the trees.

Thus a large cover up has grown covering up the real cause of  our homelessness and housing crisis.

The real cause of our housing and homelessness crisis lies at the door of government compliance and obedience to the dictates of the Irish Central Bank. In fact, so great is the coverup that it has morphed into the biggest LIE perpetuated against the Irish people since the emergence of our state in 1916.

This LIE feeds upon and perpetuates complexity where none exists, it apportions blame elsewhere, it lies in the background concealed behind economic home truths that shame both Irish politicians and the people they represent. When Ireland was poor, vast housing estates on the periphery of Dublin city were built. Even in poverty, people had a place to live and affordable accommodation. Shamefully thousands of families are about to experience emergency accommodation unsuitable for families especially children.

Clearly credit unions have the money to invest over and above their reserve requirements see page 80 (3) However, the billions in assets of credit unions exist on deposit in major Irish banks and as deposits they are part of the reserve requirements or Irish banks under the umbrella of the Irish Central Bank.

Deposits of Irish Credit unions are being used to shore up a system of lack of investment in Irish property. There is no appetite in government to use these deposits to threaten an Irish banking loan book dependent on high prices and anathema to the ideals of affordable housing/social housing.

Furthermore, investment in the building of affordable housing in Ireland will compromise the investment liquidity of vulture funds in Ireland perhaps encouraging a quicker turnover of these assets and a fire sale.

The fragile nature of the mortgage sector in Ireland with billions in outstanding loans in negative equity means banks cannot afford a drop in prices causing further negative equity and a large threat to their outstanding loan book.

Many are against a large scale building programme as this may eat into their potential profits. Deposits of the credit unions are there to shore up the banks and will not be allowed freedom to invest in aspects of the Irish economy requiring sovereign investment.

Guarding against this will be the task of a puppet government tasked with defending the 1% against the 99%.

In this scenario of ‘fragile recovery’ its easier for the Irish Central Bank to lie and point to other reasons for the Irish homelessness crisis, to sing as Rome burns.

On the above count alone, there is reason to renegotiate our loan book with the ECB and look to an Irish exit from the EU along with Brexit.

At least this would give our children and next generation a home to live in. Or not be saddled with 40% of the euro cost of the financial crisis to European banks.

Clearly the Irish Central Bank ICB has neither the will nor the way to stand up for this country in its dealings with the ECB. While Irish politicians and most of the media seem happy enough to paddle homelessness and our housing crisis over the waterfall.

till again.

(1) http://cif.ie/news-feed/news/628-response-to-minister-kelly-commentary-on-social-housing-development.html

(2) http://www.irishtimes.com/news/ireland/irish-news/credit-unions-offer-government-5bn-housing-fund-1.2577604

(3) https://www.centralbank.ie/about-us/Documents/ICURNCreditUnionPeerReviewReport_July2015.pdf

FG/LB shambles re Irish Water continues. In 2013/14 investment in Irish Water dropped from €600m+ to €300m+. To balance this drop in funding FG/LB touted the notion that Irish Water would be able to massively invest in off balance funding of Irish Water with the costs of this to be borne by the new Irish Water entity. They went ahead and proceeded to fund Irish water with loans obtained on a commercial basis from Irish banks.

'Whoa! Half empty! Definitely half empty!'

‘Whoa! Half empty! Definitely half empty!’

““The ability to access private sector financing in order to invest in improving Ireland’s water infrastructure was a key reason for the establishment of Irish Water. The funds we are borrowing will be used to address decades of underinvestment. The signing of this facility demonstrates confidence in the Irish Water strategy and its ability to borrow competitively from commercial banks. Lenders understand the long-term and sustainable utility model that we have adopted,” said Michael O’Sullivan, group finance director of Ervia, Irish Water’s parent company.”

http://www.irishtimes.com/business/energy-and-resources/irish-water-signs-100m-loan-facility-with-ulster-bank-1.2101187

Phil Coulter “Cool Clear Water”

https://www.youtube.com/watch?v=rDuWhUpOqJs

In November 2014, I blogged:

“Irish Water mess deepens. Apparently the cost of installing meters was understated by €100ml or 25% over the original guesstimate. https://www.irishtimes.com/news/ireland/irish-news/irish-water-parent-company-defends-100m-extra-for-meters-1.2012959 This came by the usual route. Once taxpayers are on the hook, another 25-30% can be leached from them with no one to say BOO. Don’t ask to what extent consultants costing extra €86 ml were involved in that decision.

Then it was decided we would not use the meters!

There was a time in this democracy when an increase in vat imposed on children’s shoes would bring down a government. Hardly an eyebrow is raised at the billions shovelled to bondholders, millions to consultants, with the prospect of further billions to be leached from taxpayers by Irish Water.

Have a look at this and look fondly back at the time we had democracy and not Endocracy a la Enda Kenny.

http://www.irishstatutebook.ie/1997/en/act/pub/0029/

“LOCAL GOVERNMENT (FINANCIAL PROVISIONS) ACT, 1997

AN ACT TO ENABLE LOCAL AUTHORITIES TO ENJOY THE REVENUES FROM DUTIES CHARGED UNDER THE FINANCE (EXCISE DUTIES) (VEHICLES) ACT, 1952 , AND FROM DUTIES AND FEES CHARGED UNDER CERTAIN OTHER ENACTMENTS, TO REMOVE THE POWER OF LOCAL AUTHORITIES TO MAKE CHARGES FOR THE SUPPLY OF WATER FOR DOMESTIC PURPOSES OR FOR THE DISPOSAL OF DOMESTIC SEWAGE, TO ENABLE STEPS TO BE TAKEN FOR THE PURPOSE OF SECURING THE PROVISION BY LOCAL AUTHORITIES OF SERVICES IN A MORE ECONOMICAL AND EFFICIENT MANNER, TO OTHERWISE MAKE PROVISION IN RELATION TO LOCAL GOVERNMENT (IN PARTICULAR FOR THE PURPOSE OF ENSURING THAT THE REVENUES FROM DUTIES AND FEES AFORESAID ARE APPORTIONED AMONG LOCAL AUTHORITIES ON AN EQUITABLE AND FAIR BASIS) AND TO PROVIDE FOR RELATED MATTERS. [20th May, 1997]”

Is Irish Water illegal and can it be challenged in court under the above provision.

On December 10 we need 10 out of ten people in Ireland to come out and object to the scandalous mess of Irish Water. Its reckoned the cost of setting up Irish Water will take 10 years of charges without one penny spent of the required billions to fund infrastructural development, that’s just to pay for the quango and the cost of keeping the mess tipping over.

http://www.environ.ie/en/Publications/Environment/Water/FileDownLoad,38716,en.pdf

The funding model of Irish Water makes an interesting read. Irish Water will be funded not only by the water tax charges levied on taxpayers by regressive taxation forcing Joe Soap, unemployed, to pay the same charge on his home without a swimming pool, as that payable by Bono, a tax exile. But it will be funded by government taxpayers money.

” Government decided that it would provide annual operating funding to
Irish Water in 2015 and 2016 (“Operating Funding”)”

“The Minister for Finance has sought the approval
of the Government to provide such moneys to Irish Water and the Government decided that
it would provide an amount of equity in 2014 to Irish Water (“Capital Funding”)”

In order to borrow the billions required to develop the water infrastructure currently envisaged by Irish Water it must satisfy certain European requirements:

“In addition, the Government decision in relation to Capital Funding has been framed on the basis that the Capital Funding provided to Irish Water will be classified in Government accounts as an acquisition of equity (which would not impact on GGDeficit) as opposed to a capital transfer (which would impact on GGDeficit). This classification is only likely to be accepted by Eurostat if Irish Water is a market producer and the Government can show it is acting as a rational investor in providing the Capital Funding. If reasonable investment returns are not expected to be made then the investment will be considered as a capital transfer not an acquisition of equity.”

In today’s financial world where black is often termed to be white it’s not at all certain that Irish Water will fail the test to prove it a viable concern for European investment funding.

It’s transparently obvious to this writer that given the back-end funding of Irish Water by way of both Capital Funding and Operating Funding and the cap on increases in water levy charges into 2015/16/17, that Irish Water by no means can deliver a ‘reasonable investment return’ without Enron accounting practices.

Neither this state nor Europe should invest in this awful mess. Europeans pay water charges and do not pay through the nose for water with their taxes. We pay for both through taxes and quangos….

Enda Kenny has holed Fine Gael under the water line with this Irish Water debacle.”

At this point it is crucial to assess the damage to Irish taxpayer liabilities provided by this debacle.

“It is likely, therefore, that the interest rate to be applied on Irish Water’s €550m borrowings this year will be in excess of the 1pc applied to Government borrowings and also more than the 2.5pc rate applied to Irish Water loans from the National Pension Reserve Fund under the old financial model.”

http://www.independent.ie/irish-news/water/irish-water-crisis/total-debt-at-underpressure-irish-water-now-tops-850m-31387172.html

It’s clear the establishment of Irish Water was designed by FG/LB to follow the road of privatisation with self-sustaining commercial borrowing as a foundation for future selling off of this state asset. The true extra cost of ‘commercial borrowing’ is not being released on grounds of ‘commercial sensitivity’. The Orwellian and dictatorial anti democratic nature of the Irish Water debacle has now come home to roost.

Eurostat decision to refuse to grant Irish Water take Irish Water into off-balance accounting must surely be the coup de grace for Irish Water.

It’s a pity Eurostat had not similar powers to refuse the Irish government’s guarantee taking over €440bn of contingent liabilities in the banking sector onto the shoulders of Irish taxpayers.

Even NAMA succeeded in passing the Eurostat tests and having its €67bn paid for matched by assets in bank property securities getting approval from Eurostat.

The extent of incompetence represented by Irish Water at the political level is rivalled only with the programme of Universal health care for under sixes blocking doctor’s surgeries with rich kids availing of free medical care while those with real medical need, the old, sick and disabled, lie on hospital trollies, or waiting lists awaiting important surgery or urgent medical reports/tests.

But Irish Water wins out as an Enda Kenny vanity project the scrapping of which would be a very smart move for FG/LB, little risk of that here so far.

The Irish people who’ve already rejected Irish Water will give their verdict on FG/LB and supporters of Irish Water at the next election.

 

 

Till again

 

 

http://www.independent.ie/business/world/government-accounting-hides-scale-of-offbalance-sheet-debts-26647973.html

http://www.irishtimes.com/opinion/opinion-eurostat-decision-on-irish-water-fuels-political-storm-1.2299965

I am Charlie Grexit

January 11, 2015

deflationThe euro has tumbled in world markets its decline accelerating in recent months from a high of $1.3993 last May to $1.1868 over the past few days stimulated by fears of a Greek exit and the failure of Mario Draghi’s negative interest rates and austerity to reverse its downward spiral.

Fuelling the decline is speculation of an imminent announcement that a stimulus of up to 1 trillion euros is on the cards.

Figures show deflation is taking hold across the euro zone.

Why this is bad, explained by Paul Krugman here http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation-bad/?_r=0

The effects of low growth are magnified with higher unemployment rates exacerbated in the euro zone by public health, education and social security programmes eg

http://ec.europa.eu/social/main.jsp?catId=26&langId=en

The cost of entitlements have a deeper effect in the euro zone than in the US where half of US citizens got little more than one day’s vacation over 2014. Morality demands the population be served by government not exploited by a slave owning elite.

Further deflationary pressures are caused by falling property prices. In Ireland this has led to pressure from the Central Bank and government to stimulate this sector through dubious means.

Asset purchases from NAMA through foreign vulture funds combined with shortages due to lack of construction, lack of lending into the property sector, a hike of 20% on required deposits for mortgages maintain asset prices through induced shortages, have created a market that has priced real people out of the market and made it the domain only of the super rich.

A market depending on the spending of the super rich and excluding ordinary people is a dysfunctional market that cannot last long. There are fears a whole generation will be condemned to renting from a rental market controlled by vulture funds and the rich as property is put beyond the reach of ordinary people.

It’s likely that austerity is the euro zone will put further pressure on indebted members to cut the cost of public health and social security programmes forcing countries to change their Health Service Executive into Trolley Service executives.

Government bonds under increasing pressure eg Greece to find buyers on international markets through negative perceptions re decline in the euro zone, will force pressure on Draghi to be buyer of last resort and thus lead to massive QE for Europe.

What are the implications of QE for eurozone?

One effect of QE is to drive bond prices higher and bond yields lower. This could have a negative effect on the eurozone. If the stimulus were a success, leading to stronger economic growth and inflation, then bond yields could rise as happened in the US as investors assumed economic growth and inflation would follow.

It’s a risky business but it may be the only card left to play in the eurozone’s last chance saloon. Its more likely to fail as countries such as Greece weighed down by massive debt forcing growth into the long stall, demand burden sharing and force default. In turn, this will create pressure on other countries such as Spain, Italy, Cyprus and Ireland.

Figures for 2014 show prices across the euro zone falling into deflationary levels. The effect of this is to worsen the plight of countries and individuals heavily in debt. Spending is put off in expectation of further price falls. Contracts large and small are forced to go for tighter profit margins. Prospect of Japanese stagnation and slow decline beckons.

Growth can no longer save economies already doomed with insurmountable debt burdens.

Add to the above mix the prospect of imminent defeat of right-wing parties in coming elections. From the certain defeat of Enda Kenny in 2016 to the imminent defeat at the end of this month of Greek premier Antonio Samaras both poster boy proponents of the poisoned chalice of austerity.

In Greece the left-wing Syriza party is likely to win. Alexis Tsipras has led Syriza with the banner of 50% write down of Greek debt.

Write-down sends shivers  leading to  euro tumbling in world financial markets.

Recent measures to build walls around the euro with the ESM are not built to withstand Greek default that can spread contagion to Spain, Cyprus and Italy.

It’s likely Draghi will try massive QE to stimulate the euro, stem the outflow from Greek debt write-down demands.

Part of the developing scenario may mean stay/go negotiations with Greece with no debt write-down on the table for Greece.

In such a situation Tsipras may steer Greece out of the euro looking for support from China and Russia with the euro zone choosing to sacrifice Greece to save itself.

Whether Greece stays or goes massive buying of government bonds through QE may then save contagion from spreading to other peripherals such as Spain, Portugal, Cyprus.

However, QE for the euro zone is not without its risks.

In Ireland we’ve experienced the side effects of US QE with foreign vulture fund activity in NAMA buying everything that moves. It’s likely that the purpose of QE to stimulate economic activity will stimulate the wrong kind of activity with negative downside.

Contagion of shadow banking with $600 billion only in collateral chasing trillions of derivatives blighted by cross puts similar to  mortgages in Ireland when paper deeds from single properties were used over and over again to leverage more and more blighted assets, is a tinder bed in shadow banking ready to ignite. Perhaps Grexit could lead to worldwide stock collapse of the bull market fed by QE.

Banks prefer the paper financial markets to real markets.

An example of wrong kind of activity is requirement by the Irish Central Bank to limit mortgages to those with 20% deposits requiring couples to pony up €80000 to acquire mortgage on €400,000 house. Rise in contract working and lack of permanent positions even in well paid employment make these mounts unrealisable for the majority.

The irony is  if prices are driven down by this requirement, if a large quick fix construction programme is begun, if NAMA releases its property portfolio into the rental market, this would have a negative impact on the balance sheet of Irish banks. The capital base of Irish banks would fall, negative equity and a deflationary spiral would ensue.

You might wonder what policy and regulatory framework gives rise to the above craziness from the Irish Central Bank?

If you are a member of the banking inquiry this might even whet your appetite to fall back to the years 2006-2008 to examine in detail the advice being given to the Irish financial markets at that time to the government, in particular the regulator, by the Irish Central Bank .

You might even want to talk to Mario Draghi or Jean-Claude Trichet to microsope  ECB involvement in the collapse of the Irish economy?

Mario Draghi has refused to come before the Irish Banking inquiry to answer such questions.

I thought there may be some answers given by Professor Honahan in his essay contribution to “Brian Lenihan In Calm and Crisis” edited by Brian Murphy, Mary O Rourke  and Noel Whelan published by Merrion Press before Xmas.

Regularly hauled out as an oracle on the Irish economy,  a  regular Rasputin to Irish tsars, the secret shadows of the Irish Central bank activities, are kept under wraps by Honahan.

No luck there, he gives no information away confining himself to prognostication on the performance of Brian Lenihan as minister for Finance under the shadowy grip of economic forces the Irish Banking Inquiry one doubts has the capacity to probe.

The Irish Banking Inquiry so far has no Judge Bailey Sean Dunne probity form. Honahan gives nothing away vis a vis ECB involvement with the Irish Central Bank.

How accountable was the ECB and the Irish Central Bank in management of the Irish financial crisis?

The compliance, subservience obedience and servitude of the Irish negotiating position is summed up by Honahan, P80, Brian Lenihan in Calm and Crisis:

“While he undoubtedly considered it a failure to have had to have recourse to a financial rescue package from international official sources, in fact, Brian deserved considerable credit for pushing ahead with negotiations without the ineffective grandstanding or attempted blackmail that some other countries have sometimes tried with the IMF. By embarking on the protection of the programme long before he ran out of cash, he enabled the Irish negotiators to settle on what has been a much more gradual path of fiscal correction than that imposed on other peripheral countries.”

Notice the way Honahan steers blame away from ECB by mentioning the IMF as lender of last resort. In fact IMF officials objected to the severity of the package offered to Ireland, but this was resisted by ECB who held sway as lenders over the IMF.

Blackmail is mentioned by Honahan, but facts show Ireland was blackmailed into agreement not to burn bondholders. Ineffective grandstanding is another contemptuous term used to try and stop comparisons between Iceland and Ireland, with Iceland succeeding and Ireland failing in falling victim to odious extortion by an elite cadre who had sold out taxpayers, to preserve their personal wealth and power base.

This is paid for currently by Irish people on trollies in A&E departments across Ireland with their health service in ruins.

Honahan’s role in vindicating the right of Irish people to fair treatment by external bondholders can be likened to that of Dermot MacMurrough circa 1120 who made his way to the Court of Henry II of England and offered to become a vassal to the King in return for military aid in retaking his kingdom.

Honahan and the Irish Central Bank negotiators retook Ireland for the ECB. They did not vindicate the rights of Irish taxpayers; they did not repudiate odious debt.

The terms of the bailout delivered to Ireland were subsequently watered down when other precedents for interest rate reductions for Greece and Portugal were set, that were less odious.

But its true, Irish negotiators gave up without a fight.

Perhaps Honahan will be brought before the Irish banking inquiry and given the same grilling Judge Bailey has given the Dunnes in the US. But I wouldn’t bank on it.33

At times, you would be forgiven for thinking Honahan was minister for Finance himself and that he had usurped that office.

The real shadow cabinet of Kenny, burton, Noonan and Howlin takes its orders from the erstwhile dictator Big Brother Mario Draghi with Honahan as underling.

For them, there is no third estate pillar of democracy with the right to freedom of information, the right to share this information with the public. This is a drift to extreme right-wing dictatorship unheard of in the past.

As if to emphasise this point during the past week, Censorship and propaganda stalked the land.

http://www.independent.ie/irish-news/politics/exclusive-fine-gael-snubs-vincent-brownes-tv3-general-election-debates-30893048.html 

Vincent Browne has been targeted both by Fine Gael and Labour the same week Charlie Hebdo was targeted by terrorists attacking freedom of expression in the media.

“Independent.ie can reveal that the party has refused to allow of any of its candidates to take part in the debates in what has come as a major blow to the broadcaster”

Surely the seriousness of this attack on freedom of expression and blatant effort at censorship should at least warrant every independent in the Dail refusing to attend until this odious ban is lifted?

Perhaps FG/LB do not wish to be questioned on the claim of growth levels for 2015 of 5% for one of the most heavily indebted countries in the world, in the face of deflationary or no growth in Europe, hospitals without beds for citizens, teachers on strike to prevent standards from falling further, only part-time jobs in the public sector, mostly contract jobs in the private sector, induced shortages in the property sector.

After the Irish water fiasco and the burning of the Junior Cert fiasco, his refusal to allow FG/LB candidates  to appear on TV with Vincent Brown, will Enda Kenny to prevent political debate like Goebbels organise a public burning of books?

 

Till next time.

 

 

End

 

 

The Scott Expedition!

May 25, 2014

Part 11 (from prev blog)

The US government’s own data shows a net worth of minus $16.9 trillion, over 100% of GDP in the red.  And even in their most optimistic projections, the government tells us that growth in debt will outpace growth in tax revenue. US has not freed itself from the debt catch 22. 

The US has struggled with the impact of the crash of 2008 with reforms that have stopped short of the Glass Steagall response to the crash of 1929 in its principal reform compelling the separation of investment banking from commercial banking built around the protection and securitisation of depositor funds. Mario Draghi’s imminent stress testing of European banks is reminiscent of Timothy Geithner’s stress testing of US banks that arguably restored confidence in banks.

The more debt is paid down through austerity, the more the economy takes a loss. The critical point of 90% debt to GDP has been passed by US and many members of the EMU: http://www.economist.com/news/finance-and-economics/21576362-seminal-analysis-relationship-between-debt-and-growth-comes-under “This Time is Different”. In their paper Ms Reinhart and Mr Rogoff sorted the figures into four categories of indebtedness and took average growth rates for each.

They found that public debt has little effect on growth rates until debt reaches 90% of GDP. Growth rates then drop sharply. Over the entire two-century sample (from 1790 to 2009), average growth sinks from more than 3% a year to just 1.7% once debt rises above the critical level. In a shorter post-war sample the decline is more dramatic; average growth drops from around 3% to -0.1% after the 90%-of-GDP threshold is attained.” Ireland’s debt to GDP is 123% and we’re struggling with correspondingly low growth levels of >1% struggling under projected growth levels of 2-3% that are never realised.

But hey, the troika are there to bail us out further, so markets believe. We have a coalition government  of  bailiffs willing to superimpose on taxpayers austerity measures to pay the crippling interest repayments circa €8bn/pa looting Irish public services while the wealthy are protected from having to pay a fair share of such bills. Economic stagnation is buffered by propaganda efforts to persuade the public that a small increase in employment levels recovering from 15% to 12% means such austerity methods are succeeding. Not unrelated to the success of austerity, If you can have a look at this John Stewart/Tim Geithner interview of recent days. Its elsewhere on YouTube and other places in spite of efforts to prevent it viewable for Irish audiences: http://www.youtube.com/watch?v=9R7OL2ZyZKQ  Geithner is the man who faced down our Minister Noonan telling Noonan he had to pay up on senior bondholder debt.

Geithner played the same ruse in the US insisting derivatives of AIG worth €60bn be paid back at 100% on the dollar. So-called recovery in the US has meant the return of profits to the banks without the trickle down benefits of a growing economy. Instead wealth has been concentrated and consolidated for the TBTF banks with the wealthy 1% given even more power.

The printing of money invested in stocks and shares has led to inflation of wealth for the rich and contraction of economic freedom and asset participation by the poor. This is an economic recovery sparked by fools gold that will not end well. Dodd Frank and Volcker have not defused the financial weapons of mass destruction that have built up in the shadow banking deregulated toxic world of global financialisation since the early 1970’s. Instead Geithner has revived the monster that gave us 2008.

“Most first time homebuyers can’t afford a home in the US. They are overburdened with college student loan debt, and the ‘sins’ of the fathers who delivered them over 200 years of servitude. There is no way those people will fill the mortgage gap and create a true and sustainable housing market without, once again, interest rate fixing and more fraud to prop up a goofy system.”

Similarly in Ireland property through financialisation of the property market still remains a speculative bubble that the present government refuse to lance. Property prices are simply too high to be affordable except by cash rich speculators. It is conceivable that a future beckons with speculators overcoming the property sector where family home buyers will be squeezed out of the market entirely.

This has already happened in some states of the US where hedge funds rich on QE and Geithner handouts, have bought left right and center squeezing out local homebuyers. Homebuyers are now forced to rent and with a cornered market those rents can be set at any price. This is a consequence of the financialisation of the economy destructively consuming the real economy. http://online.wsj.com/news/articles/SB10001424052702303661404579177873015074830   ireland-government-debt-to-gdp While radical financial moves have been made led by Paulson/Geithner(see below) to counteract the effects of Wall Street 2008 that led to imminent financial meltdown , in Europe it is believed losses incurred by the crisis in 2008, have been largely concealed by regulators ‘successfully’ hiding the losses of large banks in many EMU jurisdictions.

Stress tests across banks in the EMU some Friday next October will see phone calls made to each of the chief executives of every bank in Europe to reveal the findings of those tests. No one knows the full details of the formulae being used to calculate any shortfalls in these banks. Any bank found to be short will have until the following Monday to procure the money. Speculation on this blog surround the recent arrival circa last December of hedge fund miracle buyins to large tracts of the NAMA portfolio.

Is the Irish bank book currently being sterilised by such investments being groomed for the imminent stress test appraisal involving property and commercial/private loan exposure to marked down losses? Prof Morgan Kelly recently drew attention to the large exposure of Irish SME’s to outstanding levels of loan obligations that have yet to be written down. Are we currently being recreated into a new financial entity spawned by global financialisation rather than real economics? Have Irish banks marked down losses and how will they fare in oncoming stress tests?

Is a world of appearances dumping and triumphing over the real world?

According to Iain Dey writing in Sunday Times, 25/05/14, Business 8, European banks including Irish banks face the following scenario in regard to Mario Draghi’s ECB bank stress tests: “”..big banks have already started to brace themselves for the fallout. deutsche Bank launched an €8bn share issue last week to bolster its bank sheet, partly due to fears the probe will expose the fault lines in the German financial system.

Italy’s banks have raised cash, and France’s BNP Paribas may follow soon” “”The market thinks about 30% of Europe’s banks should fail the stress test,” said a senior director at a large European bank. “If only 5% are told they have to raise more capital, the test will look soft and it will be dismissed as a political fudge. – which means the whole exercise has been pointless. “But if 40% fail that’s a lot of money to find.”

Global shadow banking excesses deregulated have covered up real economic realities hedged beneath a false economy built upon illusion and farcical casino gambling bubbles in stocks and shares and paper derivatives not worth the paper they are written on.

The Geithner solution to global crisis built upon creating more paper and more illusion with soft pedal reform, is a recipe for global recession and a worsening of the global economy. More economic activity could have been generated if TARP assets were handed out to ordinary american taxpayers in tax benefits and social welfare entitlements with Hooveresque dam building programmes  designed to improve US infra structure, roads, schools; rather than handouts to gambling bankers playing derivatives and the stock market pretending they are building the real economy instead of a global toxic paper dump of appearances as the world eats its young.

In Ireland Fine Gael pride themselves and publicise at every opportunity their willingness to take the tough decisions to save the Irish economy. These decisions have meant denial of medical cards to the long-term disabled and the imposition of odious debt upon Irish taxpayers. The tough decisions have not been to stand up to Timothy Geithner to refuse to pay senior bondholder gamblers; they have caved in to the dictats of the troika; they have failed to renegotiate our debt to involve burden sharing and debt write down.

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program The Public Bank solution Some radical alternative solutions to our banking crisis have emerged in Ireland and US involving the proposed setting up of a more sanitised form of banking, namely, Public Banks. In the US there has been debate around the question of the constitutionality of Public Banks vs Private Banks. So-called “public banks” as we know them today are not Public Banks in the strict sense of the term. If they were, they would be issuing ‘greenbacks’.

Instead they trade in dollars backed by the Fed just as private banks do. Public banks are a hybrid version of public savings banks or chartered banks.They lend out deposits under regulations that claim to favour depositors rather than lenders or bank shareholders. You could regard them as private banks who claim they operate more in favour of the public interest. ‘Public’ Landesbanken German banks operating in the framework of Sparkassan German public savings banks, have gotten into deep trouble through derivative speculation (reform of shadow banking and unregulated derivative gambling is more urgent than ever) proving public banks tend to move from a hybrid model to a private commercial one before they crash.

Its likely though Angela Merkel has moved to protect Public banks in Germany by ensuring they will not be subject of stress tests (an ominous omission in regard to the fairness of stress testing), Landesbanken strategic lenders of the Sparkassan public bank model, have lost badly through derivative speculation during the Wall St meltdown.

The public bank model offers more than it can deliver and it may be unfit for purpose in a world increasingly dominated by global financialisation and looting due to Shadow banking practices. Public banks rely on the dollar and may represent  more prudential forms of lending practice but they operate in a world whose rules favour private banking.

The pro banker republicans in fact were the ones who opposed the 1913 Fed Reserve Act. The act provided for a committee that would run the 12 regional reserve banks owned by commercial banks and the committee would be appointed by the President. ‘Bankers would run the twelve Banks, but those Banks would be supervised and by the Federal Reserve Board whose members included the Secretary of the Treasury, the Comptroller of the Currency, and other officials appointed by the President to represent public interests.’

Examination of the constitutionality of the Fed Reserve Act 1913 needs to be seen in light of the reforms of Glass Steagall Act in the 30’s and removal of regulatory controls in the 70’s and Dodd Frank Reforms and Consumer Protection Act that already may be proving too little and too late to save the dollar.

The world of shadow banking and global financialisation reveal contamination that threatens to overwhelm and destroy capitalism and democracy with growing signs of extreme right, nationalistic backlash both political and economic. What is required to reform the global economic system are deeper changes than those provided by Dodd Frank with its Volcker Rule amendment:  http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act

“Comprehensive regulation of financial markets, including increased transparency of derivatives (bringing them onto exchanges);” has yet to be fully implemented. Separation of commercial banking from investment banking as in the Glass Steagall Act is matter of urgent reform. Preventing this are TBTF entities such as Goldman Sach’s whose ruthless manipulation of financial markets allows them to manipulate the commercial aspects of banking activity with permeable Chinese walls giving them permanent access to business information they use to exploit investment opportunities( see last blog re Libor rigging)

There are quite a few ideas out there masquerading as solutions to the global financial crisis that are in effect worthless. You’ll find them paraded as success stories, look for wide grinning faces of arrogant disdain among politicians who promoter austerity. Austerity for the people and not austerity for bankers!

Lose money at the financial casino tables of Wall Street. Solution, give them more money to play with and replenish losses of the compulsively addicted. In Europe the solution is to introduce austerity and give the bill for the losses to taxpayers and the public sector. Reward the bad and punish the good. Steal from the poor to pay for the odious losses of the wealthy under threat of financial Armageddon.

The growing divide being rich and poor gives more power to the rich to prey upon and loot the fallen assets of those who’ve lost out in the crash. Thus hedge funds rich on QE from Wall Street bailout like to launder the proceeds by scooping up the proceeds of great deals provided by NAMA who’ve done the work in sterilising property portfolios and packaging them into nice economic ribbons and bunting ready to be picked clean by loose hedge fund money.

This is a world where virtual money has now become the new real.

Flushing The Toilet

In Europe things are not going that well. Interesting times are with us. France and Italy and Spain going under with deteriorating growth rates indicating recession.

In Ireland we face the problem of no affordable for the young. Solution 100% mortgages.

In the US Federal debt has been rising, and will soon exceed 90% of GDP. That should ring the alarm bells. According to Reinhart and Rogoff, author of the 2011 book, This Time Is Different: Eight Centuries of Financial Folly. Reinhard and Rogoff are of the opinion that when government debt exceeds 90% of GDP, the economy will contract at a 0.01 annual rate. This is now known as “The 90 Percent Rule.” The concept is that giant debt levels will crowd out economic activity and hamper growth. Incidentally, debt levels in Europe are close to the 90% threshold. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/5/13_R._Russell_-_I_Saw_Bread_Lines,_Babe_Ruth_&_The_Graf_Zeppelin.html

What’s wrong with this picture?

Maurice+McCabe001 http://www.independent.ie/irish-news/elections/kenny-shakes-hands-with-whistleblower-garda-mccabe-30287155.html

Answer A: Unfortunately Garda McCabe has been relegated to directing traffic while an Taoiseach Kenny is delegated to run a country. (reader, you need to be Irish to get the context) http://en.wikipedia.org/wiki/Scott_Medal

Answer B: Garda McCabe deserves a Scot Medal; An Taoiseach leads  ‘Irish economic recovery’ Scott expedition heading for disaster.

Answer C: Garda McCabe’s actions have led to imminent reform of the Department of Justice.

Enda Kenny’s government presides over the destruction of the state through austerity. (Each  of above correct) Sometimes in spite of all the propaganda re ‘tide is turning’, ‘growth returning’, hard decisions courageously made by this government, a small number of new jobs for those young people left behind who have not emigrated yet, massaging of employment statistics, the truth will out.

Launcelot GobboNay, indeed, if you had your eyes, you might fail of 
the knowing me: it is a wise father that knows his 
own child. Well, old man, I will tell you news of 
your son: give me your blessing: truth will come 
to light; murder cannot be hid long; a man’s son 
may, but at the length truth will out.”(The Merchant of Venice)

Lets look at some home truths: Signs of a new property bubble in Dublin already covered in this blog. how is government responding: http://www.merrionstreet.ie/wp-content/uploads/2014/05/Construction-Strategy-14-May-20141.pdf A highlight of the document is the insane suggestion that State guarantees be provided to boost loan to deposit ratios of borrowers from 80% to 95% on new mortgages.

The bank extends 80% based on the property and the ability of the borrower to repay and the state jumps in with a further 15% leaving the borrower to get a 5% maybe from elsewhere, a credit union perhaps; end result 100% mortgages, a prime cause of the recent property bubble meltdown….

The 2020 property document above was obviously written by bankers for bankers. We have a government of bankers for the bankers.

The solution to the property crisis in Dublin is regulated management of the sector. There is adequate levels of serviced land available in industrial areas of Dublin that would welcome a docklands type regeneration. Planning laws require overhaul to release this land into state ownership.

Opportunity and enterprise stimulus with investment using the floatation of a state investment bond to finance an immediate large-scale building programme for the Dublin region could begin immediately.  Pension Fund investment could be used.

The most important regenerative aspect of such a project would be to fix prices to three times the average industrial wage. Many other creative responses are available.

However its in the interest of vampire banks to keep property prices high to keep toxic assets primed.

The most problematic aspect of the housing crisis in Dublin is the problem of affordability.

The stated objective of reducing prices, introducing affordability, regulating costs of land, materials, building costs, and matching these to what people can afford, needs to be the bottom line for recovery to take place.

Instead the empty government strategy is to try to stimulate demand for cash rich investors, to make large profits for ballyheabanks, both selling large loans and profiting from them at the expense of Irish taxpayers,  indicative of  disastrous failure of this government.

Tough Decisions

Often touted in unison by both Fine Gael and Labour is how they saved the Irish economy from financial Armageddon and in order to do so they had to take the tough and courageous decisions.

Unfortunately the decisions referred to did not amount to showing some backbone and standing up for Irish taxpayers against the dreadnought troika demands for odious reparation of our debts.

It’s quite incredible to believe that an Irish government was so subservient to the EMU that it undertook a bailout of €67 bn forced on it by the troika to payback losses made by private Irish banks to banks in Germany and France and elsewhere.

In the US questions are raised re how ethical it is to have used TARP money generated out of thin air to bailout banks and not home owners. In Ireland, the so-called ‘tough decision’ by government parties has been taken to have Irish taxpayers  landed with the bill. Compliance and obedience mix with incompetence in defending the best interest of Irish taxpayers is the new norm.

It’s incredible to believe lack of regulation on the part of the ECB being partly responsible for the debacle, was not stimulus of a collective response to bail out Irish taxpayers by freeing them from this debt that was not theirs.

Instead this debt was saddled on Irish taxpayers. Irish taxpayers not only suffered the personal loss of falling property prices and the meltdown of the Irish economy, but Irish taxpayers were forced to pay the losses incurred by foreign banks and bondholders. Fine Gael and Labour claimed a small reworking of our promissory notes into legalised commercial debt and not the tearing up of the promissory notes, as a success. Reworking of debt into longer term obligations has been touted as ‘success’ by negotiators who failed the test of acquiring debt write down of even a portion of our debt.

Looking at this more closely its clear the majority of Irish politicians are not responsible for this state of affairs. In fact most Irish politicians would not be informed enough on economic matters in general even less so on macro economic policy. Responsibility for these matters is taken out of their hands and resides in a small group who dictate policy:

http://www.taoiseach.gov.ie/eng/Taoiseach_and_Government/Cabinet_Committees/Economic_Management_Council_for_attachment_.html

Taoiseach (Chair)
Tánaiste & Minister for Foreign Affairs & Trade
Minister for Finance
Minister for Public Expenditure & Reform
– See more at: http://www.taoiseach.gov.ie/eng/Taoiseach_and_Government/Cabinet_Committees/Economic_Management_Council_for_attachment_.html#sthash.qnzXCdYu.dpuf

The evidence points to policy being formulated by the banks and handed to the above to execute? How else to explain the ludicrous mistakes of mismanagement that has led to bondholder payouts, compliance to odious and extortionate rates of interest without share burdening of troika bailout, the current 15% insurance deal for first time buyers and ongoing austerity burdens crippling taxpayers.

Philippe Legrain used to be head of the team of strategic policy advisers to the president of the European Commission, José Manuel Barroso. In his new book, European Spring, Philippe Legrain writes: “had Irish banks defaulted on all their debt at the end of September 2010, German banks would have lost €42.5 billion, British ones €27.5 billion and French ones €12.3 billion.”

Legrain describes how Jean Claude Trichet blackmailed the Irish government by threatening to cut off liquidity to the Irish banking system which would mean forcing it out of the euro. Unfortunately, second-rate Irish politicians charmed and entranced by Europe did not have what it takes and they fell in with European demands.

Following the dictats of bankers has led to massive emigrations and massive unemployment and an unconscionable debt burden that is increasingly more unmanageable.

So-called reforms of the health service currently amount to a programme to replace nurses with ‘care assistants’. Our schools are 50% filled with part-time posts with embargos on appointment of fulltime teachers with many schools filled with teachers unqualified to teach subjects they are required to teach on a daily basis.

‘Reform’ ‘hard decision’ regulation through external examination to Junior Certificate level in our schools is being abandoned under the false flag of ‘reform’. Property charges and water charges with falling salaries and rising taxes are bleeding the country dry.

A proposal to solve water supply problems in a country awash with water amounts to the setting up of an expensive and wasteful quango without one leak being fixed. Hopes rest on the quango being sold to a hedge fund who will privatise Irish water and extort further water levies from taxpayers who already pay taxes for their water.

The energy sector is a mess with proposals for pylons and energy reform under hold with the refusal of Pat Rabbitte to publish a white paper. Endless inquiries and committees of investigation in energy, Justice a mess.

Tough decisions amount to attacking the old, disabled and the crippled. They do not mount to tough decisions to face up to those responsible for odious debt foisted on Irish taxpayers.

In a white is black propaganda world even the word ‘tough’ has lost its original meaning.

End

http://www.theguardian.com/money/2014/may/22/tim-geithner-book-financial-crisis-banks-bailout

 

Part 1

Senator Finance Committee chairman Ron Wyden, a Democrat, said he wants to make it harder for U.S. companies to move their headquarters abroad to lower their taxes for inversion deals that take place on or after May 8, 2014.”

“A recent bid from drug-maker Pfizer Inc to acquire AstraZeneca Plc, renewed attention on corporate inversions. The potential deal would allow U.S.-based Pfizer to re-domicile in Britain to take advantage of a significantly lower corporate tax rate there.Crash_Zeppelin_LZ18_(LII)

In April, days after the potential Pfizer deal was made public, the Obama administration said it was seeking ways to curb inversions.”

Its becoming more difficult to provide welcoming tax haven arms to lure MNC’s and others to our shores with financial services provided by the IFSC. Greater regulation of the tax avoidance shenanigans of corporates is on the cards.

http://www.reuters.com/article/2014/05/09/us-usa-tax-inversion-idUSBREA4801M20140509

Financial Transaction Tax

Concerns about jobs at the IFSC and concern MNC’s may wish to relocate to other jurisdictions are behind Ireland’s opposition to FTT. It’s also likely the question of FTT has not been sufficiently grasped by the Department of Finance. Much as Department of Justice ignored alarms from whistleblowers through reliance on advice from Callaghan, Department of Finance relies on advice from stakeholders in the banks both political and otherwise.

In its opposition to FTT Department of Finance is in need of some serious overhaul. It will be a matter of some unsurprise (my word) if deficiencies in the Department of Finance are found by the oncoming banking inquiry to be of such gravitas to have led us to such debacles such as the ill-fated ‘Guarantee’. We shall see.

On Europe’s side FTT is seen as a way to dismantle Ireland’s status as a tax haven, a financial weapon of mass destruction, a tax haven luring companies to Ireland with low tax rates and low corporation tax. It’s not so much the MNC’s that are of concern here but the vast array of shelf companies many no more than a post box that avail of IFSC services. Regulation of financial trading abuses could spell the end of financial services reliant on global freedom from regulation.

In Ireland’s case this could see the departure of IFSC clients to London to avail of freedom from regulation.

It’s ironic our membership of the euro prevents us from going the way of sterling. London’s capacity to reject this tax and place London’s financial services on a better competitive edge  to Dublin behoves the question whether we should have joined the sterling area rather than the eurozone.

Such exodus could stir  opportunity to reject odious debt, leave eurozone, rejoin sterling as our difficulties deepen under our weight of indebtedness as we escape the toxic brand of the euro.

We need a worldwide financial transaction tax.

Rigging of the Global Financial system

http://www.forbes.com/sites/greatspeculations/2014/03/18/fdic-sues-16-global-banks-for-roles-in-manipulating-libor/

The FDIC filed the lawsuit on behalf of 38 banks which went bankrupt at the peak of the downturn in 2008, as a considerable part of the losses for these banks were incurred on interest-rate derivative products sold to them by the bigger banks. As the bigger banks were in a position to influence the benchmark rates in a manner suitable to them when the crisis hit, the losses on these products were exaggerated for the failed banks, including Washington Mutual and IndyMac. The lawsuit names U.S.-based banks Bank of AmericaJPMorgan Chase and Citigroup, as well as other globally diversified banking groups as well as the British Bankers’ Association which oversaw the LIBOR fixing process at the time.”

Can real markets survive the  financialisation of the ‘real economy’  masquerading as the new real? The global financial system has many more balls to keep in the air and risk of slippage is increasing rather than falling. Quantitative Easing, subprime lending, rigging of the derivative market, skyrocketing stocks and shares as the real global market undergoes austerity, now has another market manipulation device in rigging of the price of gold:

Throw into the mix accusations of the fixing of global currency rates

http://dealbook.nytimes.com/2014/05/05/banks-sued-on-claims-of-fixing-price-of-gold/?_php=true&_type=blogs&_r=0

One is reminded of the plot of Clash of The Titans(Simpsons)250px-Dump

 Mayor Quimby denounces him for spending the Sanitation Department’s yearly budget of $4.6 million in only a month. To solve the budget crisis and pay the workers for their services, Homer gets cities all over the United States to pay him to mash their excess garbage into the abandoned mine shaft on the outskirts of Springfield. The rest of the family warn Homer that this will be endangering the town, but he claims there is nothing to worry about. Eventually, despite the budget crisis having ended and the workers receiving their salaries as promised, the garbage builds up underground and begins to erupt, pouring trash all over the town. At a town hall meeting, Homer gets fired from his post and replaced with Ray Patterson, but Patterson declines reinstatement to the position, expressing his amusement at them “wallowing in the mess [they] made.” With no one else to fill for Sanitation Commissioner to clean up the trash, Quimby then takes extreme measures by moving the entire town five miles down the road from its current site, but Lisa points out that even though they are transplanting Springfield, they will just start littering again when they finish moving.”

http://en.wikipedia.org/wiki/Trash_of_the_Titans

Those Searching for Plan B

With a failed Department of Justice, proposals to seriously undermine education by doing away with the Junior Cert, proposals to fill GP waiting rooms with free health care for the under 6 yrs paid for by austerity for the majority, selling off resources such as water heading for an Enron Californian Energy nightmare; hapless failure to deal with odious debt foisted on us by the troika, will gravity bring about the inevitable? Ruinous plans of the previous administration have not only been compounded, but have been exponentially made worse by the present administration.They have no plans other than making hay (jobs) while the sun disappears behind the clouds of austerity.

http://en.wikipedia.org/wiki/Tobin_tax300px-European_Union_financial_transaction_tax.svg

Direct supervision and stress testing of banks in Germany has been watered down with the news it will be limited to banks with more than €30bn and the Sparkassan are happy.

http://online.wsj.com/news/articles/SB10001424052702303661404579177873015074830

Stress testing of banks in 2014 with growing austerity, low inflation could be a watershed. Its becoming more difficult to keep the financial Zeppelin balloon in the air. Not all is bad, fears of the consequences of financial Armageddon have seen the hawks depart from confrontation over Ukraine and efforts to find a solution have found renewed impetus.

The problem with the global financial system is a systemic one.

Tobin proposed:

The tax on foreign exchange transactions was devised to cushion exchange rate fluctuations. The idea is very simple: at each exchange of a currency into another a small tax would be levied – let’s say, 0.5% of the volume of the transaction. This dissuades speculators as many investors invest their money in foreign exchange on a very short-term basis. If this money is suddenly withdrawn, countries have to drastically increase interest rates for their currency to still be attractive. But high interest is often disastrous for a national economy, as the nineties’ crises in Mexico, Southeast Asia and Russia have proven. My tax would return some margin of manoeuvre to issuing banks in small countries and would be a measure of opposition to the dictate of the financial markets.[3][4][5][6][7]

http://businessetc.thejournal.ie/10-eu-states-to-bring-in-financial-transaction-tax-legislation-646984-Oct2012/

Given 10 EU member states already have a form of a financial transaction tax in place, the proposal would effectively introduce new minimum tax rates and harmonise different existing taxes on financial transactions in the EU. According to the European Commission this would also “help to reduce competitive distortions in the single market, discourage risky trading activities and complement regulatory measures aimed at avoiding future crises”.

It’s a useful device that would put a spanner in the works in many of the financial algorithms in software used by the TBTF banks to raid financial markets.

http://en.wikipedia.org/wiki/European_Union_financial_transaction_tax

Overhaul of world financial markets is long overdue. Very little progress has been achieved though many support change:

“The Obama administration leans to the first view, saying the crisis showed the vulnerability of the financial system to activities beyond the scope of regulation. Part of its remedy is to standardize most derivatives, instead of relying on the arrangements many companies favor, which users negotiate privately with banks. The administration would force trading of those standardized derivatives more into the open, in some cases onto exchanges, with settlement handled by clearinghouses.

The administration isn’t alone. The Group of 20 major economies last year supported trading standardized derivatives on exchanges by the end of 2012.”

This is 2014 More of this in Part 11  ……..(next time)

End

http://online.wsj.com/news/articles/SB10001424052748703685404575307034252253118