Nepotism

April 6, 2017

Property prices in Ireland are rising substantially faster than wages and salaries. This is unsustainable. Prices today are beyond the reach of ordinary people.

The market today is sustained by shortages and vulture funds and wealthy relatives able to put up the €60000 their sons and daughters require to put up front to get onto the property ladder.

Compare to the 50’s in Ireland where housing estates around are major cities were built in poorer times. Those on an average industrial wage could afford a house.

Today the market is controlled by broken banks sabotaging the efforts of those trying to reduce prices through large building programmes.

If house prices come down, banks could crash as their unsustainable lending into the commercial, residential and buy to let market goes into negative equity.

Nevin Institute for Economic Research recently came to the sobering conclusion:

“Lack of access to affordable quality homes constitutes a significant crisis for workers, families and communities in the Republic of Ireland. Current Government plans appear to be insufficient to make a significant impact. Pressure and strain on individuals and families is a direct consequence of under-investment over many years as well as a failure on the part of a market-led and property developer-led model of housing to deliver enough houses to meet the demands of a growing population.  We propose a carefully planned programme to construct 70,000 new homes in addition to the existing stock of normally occupied housing in the Republic of Ireland. A key part of this plan is the putting in place of a European Cost Rental Model (ECRM) on lines already outlined by the National Economic and Social Council (NESC) and referred to in a recent report of the Oireachtas Committee on Housing and Homelessness.   The optimum solution, we propose, is the establishment of The Housing Company of Ireland which will draw on long-term borrowing combined with an equity injection from the Ireland Strategic Investment Fund and undertake or commission, on a commercial basis, a programme of planning, building, acquiring and renting of new homes.  This investment will supplement and further strengthen that of the Local Authorities as well as the voluntary housing associations in the area of social housing. The figure, below, summarises some of the key features of the ECRM.”

Have you seen the cranes going up recently in Dublin and Cork to build residential housing estates/apartment blocks…neither have I. Government inaction hopes to persuade private developers to get involved in delivering thousands of homes. This won’t happen as the banks to protect themselves will not loan into this market for 2 reasons, a) already mentioned above it will undermine current valuations of its lending stock b) people can’t afford the pricing. No matter how much the European investment bank get involved promising billions to Irish developers,the above 2 facts will not change. Unfortunately this makes Simon Coveney’s plans a ball of smoking  nonsense.

But remember the housing estates built around Dublin in the ’50s…..

http://www.nerinstitute.net/research/irelands-housing-emergency-time-for-a-game-changer/

The Water Framework Directive from Europe appears could be the political undoing of FF/FG coalition. The 20-member Joint Committee on the Future Funding of Domestic Water Services met today and will meet again next week to agree its final recommendations for the future funding of domestic water services.

The Water Framework Directive from Europe is a thinly disguised frame-up of the Irish people. Reckoned in excess of €8bn the cost of upgrading the Irish water infrastructure Europe has reckoned cannot be born by excessive exchequer borrowing and spending.

Unable to tax and spend through devaluation of our currency we are reined in by constrictive European Central Bank policies causing homelessness and the various crises we put up with.

The Irish Water super quango semi-state body received a subvention of €439 million in 2014 and is expected to receive €399 million and €479 million in 2015 and 2016 respectively. it’s not under the watchdog remit of the Dáil Public Accounts Committee.

IW leaks money everywhere duplicating work that could easily have continued under the aegis of local County Councils coordinated under the work of a single national committee.

Propaganda is hosed on the Irish public brainwashed to believe water charges, water meters, will curb excessive use.

95% of the excessive use is poor infrastructure with public water mains leaking into the ground, nothing to do with consumers. Are the older generation some challenged with the need to use more than the average amount of water consumption, to be levied with huge bills? Is it not simpler to ban hoses in gardens for cars and pavement washing?

This is but another reason for us to Irexit out of Europe about which there is growing support in the media, academic life, and politically.

http://www.irishtimes.com/news/politics/eirexit-could-ireland-follow-britain-out-of-the-eu-1.2864539

However little consideration so far has been given to the notion of Irexit. But Brexit is forcing Irish politics to come to grips with the implications of this move for Ireland socially, politically and economically.

http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail2016102600024?opendocument

We don#t seem to realise Ireland is a parked car on a railway crossing with trains coming at us from both directions!

“Deputy Martin is quite right that while the challenges ahead are unknown, at least if we knew at this stage what Britain’s ask will be, we could focus on that. It seems as if the Prime Minister has made it clear that the UK does not seek any kind of Norwegian system or a Swiss system, but a bespoke British requirement. In the update she gave to the other leaders at the European Council meeting, she said she would like to see the exit process be professional and well-managed and said that would be of benefit to both Europe and to Britain. Obviously, there will be discussions and negotiation about that. I will arrange for a briefing for Deputies Martin and Adams and anybody else by the senior officials here, who will give the Deputies the details of what they have been discussing with permanent secretaries across the water. They cannot get into too much detail because the Government has not made its decision. As the weeks go on, arising from the civic dialogue and the North-South Ministerial Council, we will have a wealth of information on which we can begin to focus. However, really and truly, until the Prime Minister moves and triggers Article 50, we will not be in a position to say what the definitive position is of the British Government. President Juncker, President Tusk and everybody else have made it clear that there will not be any formal negotiation until that happens. Michel Barnier will be around to everybody in the meantime. The Minister of State, Deputy Dara Murphy, has been meeting all his counterparts. The Minister for Foreign Affairs and Trade, Deputy Flanagan, has the same requirement as all Ministers at a European level to make direct contact so that people understand in the first instance from a European perspective the importance of the peace process, the connections between Ireland and Britain and so on. I will see that Deputies Martin and Adams are briefed at the..”

Its hoped that the gradual implications of Brexit for Ireland, the threat against the €5bn agri exports, the threats against SME’s in Ireland selling into the UK perhaps considering moving there permanently to escape tariffs, the threat posed by the hard border, will gradually focus Irish minds onto an opportunity for national unity.

If Ireland were to leave Europe a new deal could unify northern and southern Ireland outside the EU. Through partnership with the UK a new commonwealth of nations Scotland, Ireland, Wales, England could defend Ireland’s interests more effectively than Ireland’s membership of the EU can do for the southern republic.

But Today propaganda from Europe assures us that we are part of a team of 27 nations in the EU and we are assured that Ireland’s interests in negotiations will be supported. Who believes that nonsense?

Where was everyone on the team when Noonan went looking for support to carry the European banks’ potential losses of €40bn.

We were asked to take one for the team.

Our obedient, compliant and subservient negotiators will also be asked to take one for the team on UK’s Brexit. To test my proposition, ask Europe who will pay (money) for setting up the Irish border controls required to police the EU?

Part11

An Garda Siochana

http://www.irishtimes.com/news/crime-and-law/senior-garda%C3%AD-welcome-inquiry-into-whistleblower-controversy-1.2987127

“Under the terms of reference,  which set out what the Commission can look into, Supreme Court Justice Peter Charleton will investigate two specific allegations, and exactly what former Commissioner Martin Callinan and Noirín O’Sullivan knew about them:

  • Firstly, the protected disclosure made by Superintendent David Taylor on 30 September 2016 in which he alleged he was instructed or directed by Callinan and/or Nóirín O’Sullivan (who was Deputy Commissioner at the time) to maliciously brief the media about Sergeant Maurice McCabe and encourage them to write negative stories about him
  • Secondly, Superintendent Taylor’s allegation that he was directed to draw journalists’ attention to an allegation of criminal misconduct made against McCabe.

The Commission will investigate any contact that took place between members of the gardaí and the media about these allegations.

The Commission will examine all mobile phone records from David Taylor, Martin Callinan and Noirín O’Sullivan between 1 July 2012 and 31 May 2014 to look for any records relating to the allegations. It will also examine all electronic and paper files relating to Maurice McCabe held by An Garda Síochána.

The inquiry will also examine whether Noirín O’Sullivan leaked a specific negative story about Maurice McCabe to RTE. The terms of reference state that the Commission will:

…investigate whether Commissioner O’Sullivan using briefing material prepared in Garda Headquarters, planned and orchestrated broadcasts on RTE on 9 May 2016, purporting to be a leaked account of the unpublished O’Higgins Commission Report, in which Sergeant McCabe was branded a liar and irresponsible.

Finally, the Commission will look at whether a meeting took place between Martin Callinan when he was Garda Commissioner and TD John Mc Guinness in the carpark of Bewley’s Hotel in Newlands Cross in Dublin on 24 January 2014, and if so why that meeting took place and what was discussed at it.

Tánaiste and Minister for Justice Frances Fitzgerald said this afternoon that the government will move to implement O’Neill’s recommendations in full.”

I listened recently to some Garda speaking out on RTE on nepotism in the Gardai. Many of these excellent Garda spoke of political appointments and nepotism, the practice of giving jobs to relatives and friends, within the ranks. It’s not what you know but who you know. Experience, training, further qualifications at postgraduate level, expertise unrewarded because you knew the local political apparatchik does not favour you.

Often the corrupt will weed out excellence as its seen as challenging incompetence.

Noirín O’Sullivan, herself a political appointment has done little to compensate whistleblowers for their bad treatment by management, which continues to this day.

https://www.rte.ie/news/2017/0214/852663-garda-whistleblower/

“In a statement earlier this evening, Garda Harrison, who is based in Donegal, said: “Having read the heartfelt statement of the McCabe family, we share their heartache.Keith Harrison, whistleblower “I was ambitious for my career as a member of An Garda Síochána but given what has happened to me these ambitions have long passed.
“I continue to have respect and admiration for so many of my colleagues, the rank and file members of An Garda Síochána who are some of the best people I have ever met and who work in extraordinarily difficult circumstances.  However, I have no confidence in senior management of An Garda Síochána because of their treatment of whistleblowers.
I am coming forward publicly in order to ensure that the age of a culture of management failure within An Garda Síochána with regards to their attitude to whistleblowers comes to an end.I did not become a whistleblower lightly, given the devastating effect it has had on our family. “Garda Harrison continues to be the victim of actions by senior management against him that continues to this day under the watch of O’Sullivan.”
“GARDA WHISTLEBLOWER Superintendent David Taylor was sent a letter this morning informing him an internal disciplinary investigation into his case is still underway… TheJournal.ie can reveal.”http://www.thejournal.ie/david-taylor-discipline-3282433-Mar2017/”
O Sullivan should step aside at least until she is cleared of any wrong doing in relation to whistleblowers. To date she has done little to support and reinstate their good name apart from a few self serving words to distance herself from any allegation of wrong doing.
The recommendations of the Patten Report should also be implemented in southern Ireland following an investigation in the light of recent revelations of serious performance shortcomings and potentially criminal alteration of statistical reporting along with other management issues within An Garda Siochana.This investigation should be independently conducted from outside An Garda Siochana preferably lead by an individual skilled in best standards in international policing.http://cain.ulst.ac.uk/issues/police/patten/recommend.htm

I’m sure any external investigation into An Garda Siochana would recommend awarding each of the whistleblowers the Scott medal for bravery.

till again……

 

 

Ireland’s Dead Parrot!

February 27, 2017

Previously Ireland took one for the team in Ireland’s bailout the extortionate nature of which almost made the IMF pull out of the deal. We shouldered 40% of the exposure losses of European banks in Germany and France. Perhaps the IMF couldn’t believe we would go along with the deal but if we were dumb enough to ask for it, why should they object? Ireland’s leaders parroted the role set out for them by Jean-Claude Trichet and the ECB.

Spain and Portugal and later Greece forced a renegotiation of their bailouts and in spite of our lack of negotiating power, we had to be given a similar deal.

The Irish promissory notes  over €30bn our so-called government could have legally mounted a court challenge against refusing the payment of this gift to the ECB, instead the money was laundered into legally binding terms set in international law against a minor backdrop of shallow concessions government here touted as success.

Government once again parroted the role set out for it by the ECB and  European Commission.

Support for the financial sector in Ireland includes support for vulture funds looting our property sector with Minister Noonan’s approval in spite of a pathetic and failed attempt to close loop holes. http://www.thejournal.ie/vulture-funds-loophole-3009381-Oct2016/

Are you beginning to get the picture of gross incompetence?

How about Ireland suing the EU for its ruling that Apple owes Ireland €13bn?

Do you want white elephants?

Currently the HSE supported by government plans building the most expensive hospital ever built in the world costing in excess of €1bn.

http://www.irishtimes.com/news/politics/oireachtas/t%C3%A1naiste-defends-spiralling-cost-of-new-children-s-hospital-1.2986631

Tánaiste Frances Fitzgerald “Ms Fitzgerald emphasised the trebling of construction inflation from 3 per cent to 9 per cent as a main factor in the rise and said a new education research centre was being developed and the provision of IT for the hospital had to be taken into account.”

Wow, provision of IT not taken into account in the original estimate?

Location of the hospital is stuffed into a high density traffic area hazardous in regard to spiralling building costs. It includes the demolition of buildings still in use.

Another cheaper alternative exists cost €600ml.

http://thenewchildrenshospital.ie/

ESTIMATE OF COST (2016) of the NPH if built at Connolly

Construction cost = €400M

Hospital 118,000 metres square @ €3000 per metre = €354M

Family accommodation 4,000 metres square @ €2,000 per metre = €8M

Research Department 3,000 metres @ €2,500 per metre= €7.5M

Two satellite units – 10,000 square metres @ €3,000 per metre = €30M

ADD Vat, Fees, fit-out and equipment @ app. 50% of construction Cost = €200M

TOTAL  =  €600 M”

Whether in housing, health education or elsewhere such as infrastructure for Irish Water, Ministers busy themselves in peripatetic visitations around various interest groups across the country promising the views of lobbyists are being urgently taken into consideration.

Like a random bureaucrat picking up the phone and answering yes to every question in Franz Kafka’s “The Castle” meeting journalists becomes an opportunity to list your schedule. It’s a busy much ado about nothing that hides the bigger picture burying one’s head in the sand.

Nothing gets done, no hospitals are built to relieve the trolley A&E crisis or long waiting lists that extend into years.

No local authority housing estates are built because of vague public private partnership incentive schemes that become a patchwork of nonsensical bureaucratic folly.

Larger issues controlling the bigger picture are at work undermining the work of ministers who are no more than trolls for the banks and the financial sector undermining democracy even more.

Consider this, property has become too expensive to build and has gone beyond the reach of even the middle class.

But property prices maintained at high levels ensure the banks their previous lending into the sector will find a return for property developers who otherwise may lead the banks to go bust.

The irony is that providing development funding for large schemes of affordable housing could lead to falling prices in the property sector threatening  developers and mortgage holders and banks already in the market.

They are threatened with non return of their loans if property prices fall.

Unfortunately, journalism in Ireland is often a parrot for the status quo and those in power. Cheer leading absurd nonsense and ridiculing intelligent questioning is often crowned by arrogance and hubris that beggars belief. More examples here:

http://www.irishtimes.com/news/politics/enda-kenny-calls-for-brexit-deal-to-include-united-ireland-provision-1.2986650

http://www.belfasttelegraph.co.uk/news/northern-ireland/brexit-theresa-may-responds-to-letter-from-arlene-foster-and-martin-mcguinness-35139845.html

Enda Kenny has always been a cheer leader  for remaining in the EU and has been exploited  effectively  from the European perspective facilitating the ECB demand that Ireland take one for the team.

But his position now can be likened to the man sold the dead parrot in Monty Python. Some might consider him to be the dead parrot of Irish politics with the saga of his leaving the leadership of Fine Gael an unending distraction to real politics.

Some real issues loom.  Brexit will have profoundly negative impact for Ireland in terms of its trade with the UK ( see earlier blogs ). Ireland’s banks are still at risk exposed to large bad loan losses:

http://www.irishtimes.com/business/financial-services/bank-of-ireland-dividend-in-doubt-as-risk-profile-is-revised-1.2916390

Corporation Tax windfalls in the financial sector will not last forever as UK and US and EU restructure their own financial sectors to compete against Ireland.

We are in the middle of a housing crisis and an A&E and health crisis. Education is under funded and the target of further austerity cuts. These will be severely impacted in a negative way by Brexit.

Kenny’s response to the crisis is to propose an All Ireland provision in Brexit negotiations to facilitate Northern Ireland to rejoin the EU in some future All Ireland context if Northern Ireland wishes to rejoin the EU.

The hubris and arrogance of the notion beggars belief against the context of The Democratic Unionist Party being in favour of Brexit.

Why would the DUP wish to give away whatever sovereignty it already has to an Irish government-run by the EU whose own sovereignty is questionable?

They do not want our homeless, our hospital waiting lists, the destruction of trade between UK and Ireland and our falling standards in education.

An All Ireland Brexit with a new economic union between Ireland, Scotland, England and Wales outside the EU is a more balanced solution to Ireland’s problems. But our media ignore the issues involved in Brexit preferring the distraction of when is he going to leave?

We should be talking about a new trade agreement with the UK!

http://ec.europa.eu/trade/policy/in-focus/ceta/

CETA is a new trade agreement between the EU and Canada.

It’ll make it easier to export goods and services, benefiting people and businesses in both the EU and Canada.

The European Parliament voted in favour of CETA on 15 February 2017.

The EU national parliaments must approve CETA before it can take full effect.”

CETA has been touted as a possible template for a new trade agreement between The UK and the EU.

Kenny should instead leave the building of Ireland’s future to those who can deliver  a future for Ireland outside the EU. Don Quixote tilting at windmills is not enough with foolish United Ireland part of the EU nonsense.

Ireland needs a future not embedded in the debt shackles and austerity driven quagmire of the EU that is ruining Ireland for future generations.

Vote for IRexit and a United Ireland outside the EU negotiated under a new CETA type agreement that will consolidate Ireland’s relationships with its closest neighbours, not break them.

 

Postscript

The Irish Water controversy rumbles on. 90% of water leakage is not the responsibility of consumers but rather leaks under the watch of local authorities piped into districts along large mains. Propaganda from Fine Gael would like to blame consumers for this and have them foot the bill.

The bill for improving our water infrastructure should come out of general taxation. Large savings tackling loss of water would come through improving infrastructure lessening the overall expense of improvements. 

Technology exists without water metering each house to locate and identify large leaks by simply metering large areas and making mathematically based statistical deductions that would give accurate probability measures  whether extensive, unexplained consumption and leakage exists.

It should be easy to identify suspect areas and replace infrastructure that is beyond its sell by date. It should be possible with a small number of meters to install these in high suspect areas to get detailed profiles right down to single houses. They can be taken away and reused elsewhere when necessary.

Armed with this information it should be possible to fix such leaks primed with incentive grants to householders  unwitting victims of leaks on their premises. 

We’ll leave aside the possibility of European subsidisation of any schemes enabling the above.

Suffice it to say parroting the Attorney Generals advice based on his interpretation of dictats from the European Commission with Orwellian Big Brother, anti democratic demands, is a political failure mirroring Simon Coveney’s failure to deal with our homeless and housing crisis…..

The Fine Gael demonisation in this debate of the word ‘populism’ to denigrate the democratic will of Irish people is one that takes us closer to fascism where the will of the Irish people is set aside in favour of those who govern from the shadows.

For them democracy is the enemy. Unless we want more of the same we should seriously consider IRexit as an alternative to mindless, blind obedience fed by absurd notions such as the quango of Irish Water.

Irish Water saga is led by politicians for whom the above political failures have sadly become a way of life. 

 

 

till again…

 

 

Black Swan

October 21, 2016

 

black-swanCoveneys support of first time buyers springs more out of a concern with the needs of developers.

Notwithstanding supply shortages some developers are unable to sell properties at the current high unaffordable prices.

Coveney mistakenly confuses the inability to raise a deposit with inability to afford to pay back a mortgage.

Alarmed at the possibility of more people on foot of Coveney’s proposals taking on mortgages they simply cannot afford to pay back, the Central Bank has forced a government climb-down restricting the amount that can be borrowed  to 70% instead of 80%.

(1)“The Central Bank has said that they think the threshold whereby the loan-to-value of the property should come down from 80 per cent to 70 per cent, which would ensure that nobody is overborrowing to try to avail of the grant and I think [Minister for Finance] Michael Noonan thinks that’s a sensible alteration.

“It essentially means that more people will be able to avail of it. It’s relatively minor change but it’s a change I think that’s worth doing and so he’s happy to accommodate that.”

Actually, Simon, this is not a relatively minor change, instead this makes your proposals ludicrous. It makes any savings possible under your scheme will be eaten up by the higher cost of raising the difference between what the bank will lend and what ever savings the borrower has to make up that difference.

If there is a strong uptake, house prices will rise absorbing even further any gains  made to help the buyer. Ironically, the proposal has about as much value in increasing house supply and new house construction, as a ball of smoke.

It’s another case of Nero fiddling while Rome burns. Fiddle while Rome burns definition. “To do something trivial and irresponsible in the midst of an emergency; legend has it that while a fire destroyed the city of Rome, the emperor Nero played his violin, thus revealing his total lack of concern for his people and his empire.”

What Coveney should be doing is demanding from Europe a derogation from its fiscal space rules to raise capital on the open market or to invest from our pension fund in a large-scale construction project to build Olympic Village type apartment blocks in the larger cities to deal with this growing crisis. That and a whole range of building projects to build “affordable” housing for the whole generation of young Irish people shut out of the housing market.

Not to be outdone Richard Bruton is advertising for parents to be paid to undertake supervisory duties to help break the teacher’s strike. The irony is teachers were not being paid to do those duties since they were forced to do same under Croke Park hours. Inflammatory and incendiary as this move is pouring petrol on Rome burning, a greater irony is that teachers are striking not for better pay and conditions for themselves, but on behalf of the ruthless and unfair way new entrants to their profession have been penalised forced to accept rates of pay on a par way below that of their peers. Another example of how young people are being shafted by future leadership contenders within Fine Gael.

I’ve no doubt whatsoever targeting of teachers is a fallout from European austerity hawks from the troika down to impose gauging cuts on our public service bill to reduce the standards of health care and public education to that of public health and education expenditure in the US where it is lowest in the world.

This despite abundant riches being further amassed by the 1%.

(2) Meanwhile Europe is targeting Ireland’s corporate tax regime in its current proposals:

At present companies, or groups of companies, must deal with potentially 28 different corporate tax regimes across Europe.

The Commission will recommend that, instead, member states would sign up to a Common Corporate Tax Base (CCTB).

That would create a harmonised tax base so that a company which operates in several member states would know that in each member state its profits would be taxable the same way, and that exemptions, deductions and losses would be also be treated the same way for tax purposes.

Once a Common Corporate Tax Base was established, the next phase would be to create a system whereby tax liabilities would be “consolidated”.

That would effectively operate on a formula that would apportion how much tax is due to which member state.

Under the proposal, a group of companies would be allowed to add its profits and losses from all subsidiaries together to reach a net figure.

Tax would then be paid on the group’s net profit for the whole of the EU.

This will effectively bring to an end Ireland’s tax haven incentives such as Double Irish.

(3)…European heavy-hitters have been warned not to come after Ireland’s low corporation tax or we will leave the EU, too.

Our regime is expected to come under renewed scrutiny in the wake of Britain’s exit as they were our strongest ally in fending off demands for tax harmonisation.

…But Fine Gael MEP Brian Hayes told the Irish Independent: “That is the absolute red line issue. Any attempt made to cajole us [on corporation tax], as far as I’m concerned, we’re out the door.

Ireland’s tax haven status and leprechaun economics regime will soon end.

(4)Times they are a changing: It’s not only on this blog you will find growing support for Ireland exiting the growing shambles of the EU. Gay Byrne is now in favour of Ireland’s exit. Let’s ignore his implied call for a rerun of the Brexit vote.

To follow on from last blog, some links on the growing mess of Deutsche bank commentary by Bill Holter:

a) Deutsche Bank Walking Dead (under capitalised) https://goldsilver.com/blog/deutsche-bank-walking-dead-bill-holter/

According to Bill Holter Deutsche bank is the most systemically dangerous bank in the world, the biggest link in the derivative chain. It cannot return from the dead. 50-77$ trillion derivative exposure, walking dead institution, once you start talking about them being solvent, game is over. Zero volatility in credit and stock markets they are in lockdown.

Deutsche Bank stock market capitalisation something like 12-15bn dollars, they are under capitalised just to get to Basil 111 requirements, then there is a 14.4bn  fine against them, they have no money to cover this.

Any type of margin call will take them down…if they break the whole market goes, Italian,Spanish, Austrian banks Irish banks Portuguese banks waiting in line, amount of capital they have against the amount of derivatives they carry and are counter party for….what took years and years to grow the derivative market they will destroy markets…

Deutsche Bank is a Black Swan being pumped with air from QE that cannot go on forever. There is a limit on what can be pumped from the 99% to further inflate the assets of the 1%.

Looking forward the EU brought about a lot of good to Europe. The challenge will be to retrieve in any future cross border free trade agreements. cultural, social and educational relationships, that the bonds that have proven of real value, be retained and nourished to grow and prosper.

An inner core that has fed on the periphery to the extent that Greece, Ireland, Portugal, Spain have been forced into economic collapse by a plan promising stability, security and prosperity for all, will not hold forever.

Meanwhile Europe needs to rid itself of the legacy of a poorly constructed plan built only to serve the needs of the 1%.

 

 

till again

(1) http://www.irishtimes.com/business/budget-2017/coveney-defends-70-mortgage-threshold-for-help-to-buy-scheme-1.2836721

(2)https://www.rte.ie/news/business/2016/1019/825341-eu-commission-to-launch-controversial-tax-proposal/

(3)http://www.independent.ie/business/brexit/eu-has-our-corporation-tax-in-its-sights-after-uk-quits-34835831.html

(4) http://www.independent.ie/business/brexit/we-should-leave-eu-on-same-day-as-british-gay-byrne-backs-irish-eu-exit-if-brexit-happens-35139500.html

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…

The Commune

May 21, 2016

Worries about the global economy are on the increase and becoming more mainstream. Time Magazine regarded in many quarters as a bastion of conservatism, recently ran a lengthy article on the crisis in american capitalism(1).STOCK MARKET PLUNGE

“The U.S. system of market capitalism itself is broken. That problem, and what to do about it, is at the center of my book Makers and Takers: The Rise of Finance and the Fall of American Business, a three-year research and reporting effort from which this piece is adapted.”(Rana Foroohar is TIME’s assistant managing editor in charge of economics and business.”

” “Across all advanced economies, and the United States and the U.K. in particular, the role of the capital markets and the banking sector in funding new investment is decreasing.” Most of the money in the system is being used for lending against existing assets such as housing, stocks and bonds.”

Only about 15% of the money floating in financial markets today is used for investment in business, the rest is used to fund lending into stocks and shares and bonds and speculative investment in property.

Instead of banking and financial interests serving the economic needs of business development, business development is now on the periphery choked and suffocated by the economic concerns of financialisation.

Ironically Ireland is a global player in these financial markets with thousands of jobs in Ireland’s financial sector fuelled as well by Foreign Direct Investment(FDI) and the footprint here of global multinationals. Ireland feeds upon the very financialisation of the global economy that worldwide is of such growing concern.

Financialisation is at the heart of a new economics that prints money out of thin air using this money to finance a global casino of stocks and bonds and derivative financial instruments while real economic growth and GDP declines on a global scale.

How the illusory nature of the fungible relationship between real economic growth and the smoke and mirrors of ballooning debt levels for individuals, institutions and governments can continue, is anyone’s guess. Perhaps Quantitative Easing (QE) helicoptering of free money for Joe Soap instead of for the banks?

At the individual level, student lending, mortgage lending, credit card debt, and ever-increasing reliance on global financial markets to stimulate growth through bond creation and free QE for the rich has led to a mountain of debt that one pin may burst to see it crashing down in a global stock market crash that would see 2008 pale into insignificance.

IExit

Were you taken in by the last election? I was.

I gave FF the benefit of the doubt but no sooner were they in than abolish Irish Water became suspend Irish Water charges; no coalition with FG became support of a FG minority government.

We are left with a politics of pretence with Dail Eireann more akin to a Chinese commune committee system with jobs for everyone. Real decisions are handed down from the shadows.

Even the independents were for turning. In truth democracy is in decline across Europe and Brexit is an opportunity to prevent this decline and preserve some semblance of democracy on the European continent.

Government parties across Europe being mere doppelgänger proxies for their puppeteer masters in banking and financial circles from the ECB to national central banks across Europe. The experiment has been a disaster with banks crippled from Greece to Italy to Spain, Portugal and Ireland leading crises in homelessness, austerity and the pillaging of public services created in times of democracy.

Rueful ironies abound. Fianna Fail vote for Central Bank powers to impose lower variable rate mortgages when if truth be told the central bank supports the scalping by Irish banks of young mortgage holders to boost bank coffers.

It was too much of an ask to have Fianna Fail call for another election with Fine Gael on the ropes thrashing around uturn after uturn promising everything to all they courted for support.

In the end, risk of losing their already hard-won seats it was an easy option for Fianna Fail to uturn and support a minority Fine Gael government and join the  frenzy with abolition of Irish Water replaced with suspension of water charges for the moment.

I gave FF a vote hoping against hope, but already lesson learned. The Judgment of Solomon story from the Hebrew Bible no longer applies to these folks for whom conquering means dividing the spoils, compromise  a mask for hypocrisy and broken promises.

Lets put aside delusions and accept the fact we have a coalition Commune of the willing instead of a pretend minority government.

Meanwhile Brexit looms closer and the euro fans are out in force.

It’s not likely that we will leave Europe behind if but there are substantive arguments for Ireland leaving Europe behind, we should consider these primarily for the reason that media propaganda will not allow such arguments to be heard.

Unfortunately media enlightenment is censorious of such debate.

Trade agreements between Ireland and the UK and Nordic nations could lead to a more dynamic and prosperous future if Ireland were to join such a project.

With banks in Spain, Italy and Germany’s Deutsch Bank on the brink of insolvency, it’s arguable that the European monetary union has become the bad bank of the USA with little prospect of anything other than Japanese deflationary decline for the forseable future.

It’s a certainty the solvency of Germany’s Deutsch Bank is questionable with its exposure to default on derivatives and credit default swaps.

Ireland’s Celtic Tiger was built on unregulated lending from the ECB and instead of stability brought about economic collapse.

40% of losses shouldered by the emu due to the 2008-2010 financial collapse of satellite EMU countries was left to Ireland to shoulder.

The consequence has been descent into a proto banana republic with public services starved of investment; unprecedented divisions between the wealthy and the poor.

No austerity for the rich and a deteriorating democratic deficit nodding to a future oligarchy of financial institutions behind a puppet government keeping up the pretence of democracy, the Commune.

China

The election of a new leader Xi Jinping in 2012 has seen a clampdown on dissidents not seen since Tiananmen 27 years ago. What will happen when the ghost cities economically collapse is anyone’s guess.

We must have long passed peak debt. That is the point at which stock markets begin a bear market and sell no longer believing the real economy will grow but will instead fall into a deflationary spiral.

The manipulation of economic growth by central banks and a gargantuan and overwhelming financial sector is failing to bring economic growth. The consequence of debt levels too big to control is causing worldwide concern.

(1)”China is on track to create $4 trillion in new debt by the end of this year. As of Q1, they’ve already added $1 trillion.

To put it into perspective… if you take the amount of QE the U.S., Europe and Japan created at their peaks… it would only (I cringe at the word) come out to $3.3 trillion.

China is going to beat that in a year!”

(1)”Since the financial crisis, China has run a debt-to-GDP ratio of about 3:1. That’s twice the amount of any other major emerging country.” (Chris Cimorelli, Managing Editor, Economy & Markets)

But here in Ireland we live in a Lilliputian market paradise extolling the virtues of financialisation on an unprecedented growth spiral propelled by massive injections of bailout and Corporation Tax….

However, a global abyss of debt will not defy gravity forever as debt tsunamis gather.

 

till again…

 

  1. http://economyandmarkets.com/markets/foreign-markets/this-could-easily-become-the-worst-urban-crisis-in-history/
  2. http://time.com/4327419/american-capitalisms-great-crisis/?utm_source=nextdraft&utm_medium=email

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

Firstly, kudos and hats off to the RTE Investigation team unearthing shocking evidence of endemic corruption among local councillors in Ireland, links here (4)blindLeadingBlind

One of the councillors involved, Hugh McElvaney – a four-time mayor of Monaghan, McElvaney, since resigned from Fine Gael, his hands and fingers replete with ornamental gold rings and gold watch, pictured sweeping imaginary bribe money into his many pockets, said it all.

Hard to believe we were not watching an episode from Fr Ted’so Craggy Island.

His performance deserved an Oscar for best iconic performance worldwide for representing corruption.

Hopefully the case will be followed up by the Garda fraud squad and his past activities investigated.

This was not some imaginary banana republic in a far off land, but Ireland in the here and now 2015.

Fianna Fáil councillor Joe Queenan, a businessman and councillor, winked at his business like advice for payment to be made to a partner of his to hide the bribes. For Queenan and McElvaney clearly Ireland is a great place to do business.

“The Mahon Tribunal of Inquiry The Final Report of the Tribunal of Inquiry into Certain Planning Matters and Payments (also known as the Mahon Tribunal) contained a total of 64 recommendations for further consideration in relation to a range of policy areas, as follows: 1. Planning; 2. Conflicts of Interest; 3. Political Finance; 4. Lobbying; 5. Bribery, Corruption in Office, Money Laundering and the Misuse of Confidential Information; 6. Asset Recovery; and 7. Miscellaneous Matters.”(5)

“One of the most significant recommendations being considered is the establishment of an Independent Planning Regulator, who could assume some of the Minister for the Environment, Community and Local Government’s planning oversight functions and who could also be charged with carrying out investigations into systematic problems in the planning system. This recommendation is accepted in principle. ”

Legislation for this has not been enacted nor is it proposed in the term of the present government.

Currently, if a complaint is made, there is no clear route for a complaint to take. It’s likely to do a merry-go-round tour of government departments. Legal obstacles will impinge on any investigation. There is no white-collar anti corruption unit in Ireland staffed with enough stick to get through the swathes of soft laws protecting the right to privacy, commercial sensitivity, possible defamation or libel obstacles. There is no legislation of a quasi-judicial kind to mount proper investigation of white-collar crime protected with vast resources of legal might

Investigates showed that even today following Mahon ignored by 40% of councillors(6) ”

  • provide for the disclosure of interests, including material interests, which could influence Ministers of the Government, Ministers of State, the Chairs and Vice-Chairs of Dáil Éireann and Seanad Éireann, the Attorney General, members of the Houses of the Oireachtas, directors of public bodies and public servants, including special advisers, in the performance of their official duties;”

http://www.environ.ie/en/Publications/DevelopmentandHousing/Planning/FileDownLoad,30749,en.pdf

We should look to best practice worldwide with a view to setting up an anti corruption commission in the immediate future before the coming election.

(7)http://www.transparency.org/files/content/corruptionqas/Best_practices_for_anti-corruption_commissions_2.pdf

Transparency International have produced a paper on best practice worldwide for anti corruption commissions.

“The international legal framework advises that such institutions be independent, protected from undue influence and have adequate training and resources to undertake their duties.”

“Anti-corruption commissions are mandated differently depending on country contexts; in 2008 the OECD developed a typology of the existing models:

 The multi-purpose agency represents the most common model of a single-agency approach, combining the aspects of repression and prevention of corruption. This is the model on which are shaped the Hong Kong Independent Commission against Corruption and the Singapore Corrupt Practices Investigation Bureau.

 The law enforcement agencies model either combines the three functions of detection, investigation and prosecution of corruption cases, or specialises in detection/ investigation or prosecution. This model is the most common in Western Europe.

 The preventive, policy development and coordination institutions focus more on corruption related research, coordination of anti-corruption policies and action plans, monitoring conflict of interest regulations, elaboration of codes of conduct, facilitation of trainings, etc. This is a model that can be found in France, India, Albania and Montenegro, for example.”

Hopefully we will get an agency “combines the three functions of detection, investigation and prosecution of corruption cases, or specialises in detection/ investigation or prosecution.” That would have the powers to investigate along the lines of the RTE investigation team, then follow-up with prosecutions of the likes of Hugh McElvaney and Joe Queenan.where_does_all_the_money_go___pavel_constantin

Banking Inquiry:

Look, all they had to do was examine the loan book and follow the money. The money can be summed up in one word, “bonus”.

As stated in earlier blogs, a quick audit of the 10 largest loans describing in detail the bonuses given to those who managed those loans would have shown the bonus culture feeding frenzy that led to financial meltdown.

Of course behind the bonuses was the even darker world of bribes and corruption.

With modern technology all loans handed out in the Celtic Tiger era could be audited and investigated for patterns and loops and of course, bonuses!

The bonus culture virus infected all levels in all of the banks. It led to turning a blind eye to dodgy loans. It became so endemic that throwing caution to the winds meant you saved your job while prudent risk management meant you risked losing your job.

It was a feeding frenzy bought into by government, banking employees and management, even the Regulator and Central Bank. No q’s asked by Regulator, ECB, government.

The ECB refused to cooperate with the inquiry.

Unfortunately (1)”Irish people decided in a referendum in 2011 not to give parliamentary committees the power to make adverse findings against individuals”. An array of political and legal restraints hobbled the inquiry from the start.

(2)”Conducting this kind of Oireachtas inquiry as opposed to a Levinson-type quasi-judicial examination has brought its fair share of criticism, because of the limitations such a move involves.

Those limitations, now coming to the fore, are significant and descriptions of the inquiry being ‘toothless’ are valid.

The internal documents given by advisers, legal and economic, contain a myriad of restrictions and limitations which will have the cumulative effect of rendering the ability of members to ask the kind of probing detailed questions required as non-existent.”

Absurdly, the daft draft can be legally challenged by interested parties. Its gone out to them to see if they are happy enough with the whitewash. Only then can it be published in its current form. We wont discuss all the heavily redacted docs they got to see.

“However, Fianna Fáil TD Michael McGrath said that there are huge limitations on what the inquiry can actually say.

(3)”If I believe somebody acted recklessly during the banking crisis, and if that question as put to that person in the course of evidence and they denied acting recklessly, then it’s not open to the committee to actually conclude that person acted recklessly,” he said.”

It might adversely impact on their name and reputation? Absurd, but white-collar crime gets an unprecedented level of protection and its crimes are well hidden.

Don’t ask if it should be given to acting politicians the task to investigate white-collar crime. The Irish public in 2011 in a referendum decided it would be unwise to do so. Ignoring this Irish politicians arrogated to themselves the very method rejected democratically by the electorate.

Having bought into the compromised inquiry in the first place, Pearse Doherty and Joe Higgins wish to occupy the high moral ground and accept political plaudits by refusing to sign off on it. Spare us all from wasting all our time. Reductio Ad absurdum. Their time on the inquiry would have been better spent advocating for a full judicial inquiry given the full powers it required.

More and more democracy is being eroded. Parliamentary democracy in Ireland is becoming more and more toothless eroded and corroded by decisions taken elsewhere in the financial and banking sector. Stamped by puppet so-called parliamentarians confidence in politicians at an all time low.

The result is homelessness, a generation of young people who cannot or will not be able to find or afford a home.

The destruction of free market capitalism in Ireland continues with the shocking proposal the state bad bank NAMA’s proposal to deliver a €7.4bn development programme involving 20000 new homes in Dublin and elsewhere and 3.8 million square feet of office space in Dublin. NAMA is a state bad bank and not a developer acting in the manner of a state housing association under the USSR during the cold war in Russia. Socialism for the banks is becoming the new norm.

NAMA must be one of the most secretive bad banks in the world protected with a raft of legislation from prying eyes to hide from Freedom of Information legislation with transparency a ridiculed joke.

Developers in Ireland “The NAMA scheme favours NAMA and NAMA-supported developers over non-supported developers”. NAMA has sold vast tracts of commercial and residential property to vulture funds allowing them to corner the rent/lease market and support maximizing upward only rents.

A false floor to residential properties lending has been engineered through shortages to maintain high level lending to fill bank coffers. The present government has built nothing.

White collar crime and socialism for the banking sector means as it did in the Soviet era, a crackdown by means of non disclosure, censorship, secrecy. Suddenly government announce an extra couple of billion due from corporation tax blindness.

We have no access to audited accounts detailing the source of this rise in income. Speculation on this blog is that a large amount of the increase comes from the collapse of the euro against the dollar, MNC’s deal in the dollar so any fall in the euro means more CT.

But wonders if MNC’s are declaring more because of imminent investigations at European level into CT. And if under declaration, should not an anti corruption task force investigate if under declaration or other tax avoidance has occurred in the past.

We thrive while the euro dives. Latest economic setback for the EMU is  abolition of the Schengen agreement for the next 2 years.

The cornerstone of European economic unity was Schengen allowing a truck driver from Cork travel unhindered to Poland and beyond within EMU without border stops and border check delays. This will impact severely on trade in the EMU. Clearly design flaws in the euro have come home to roost and it’s not at all clear if the euro project can succeed and overcome its present challenges without dissolution on the table.

Irish water is silent on projects to harness all the flood water, build the lakes, storm drains, reservoirs needed for the future now it has lost its ticket to the billions it otherwise would have sought on the commercial borrowing markets. Its time to abandon that project and restore that enterprise locally under new democratic powers given to the Board of Works.

Hospitals and A&E’s remain underfunded under more risk of closure than development. The austerity programme is in full sail. Irish government pawns of the ECB are clearly at a loss what to do next.

 

till next time

 

(1)   http://www.irishtimes.com/news/politics/banking-inquiry-hobbled-from-start-by-legal-restrictions-1.2456552

(2)  http://www.independent.ie/opinion/comment/banking-inquiry-those-hoping-for-full-disclosure-will-be-let-down-30835708.html

(3) http://www.wexfordecho.ie/2015/11/23/mcgrath-banking-inquiry-will-meet-over-christmas-if-necessary/

(4) http://www.rte.ie/news/2015/1207/751733-investigations-unit/

(5) http://www.environ.ie/en/Publications/DevelopmentandHousing/Planning/FileDownLoad,30749,en.pdf

(6) http://hr.per.gov.ie/overview-of-the-ethics-acts/

(7) http://www.transparency.org/whatwedo/answer/best_practices_for_anti_corruption_commissions

Europe’s Lehman’s

May 14, 2015

Spurred on by low-interest rates coupled with the expansion of the money supply through QE in Japan, Europe and US, inflation is looming. Savings and long-term capital investment are parked and replaced with speculative, short-term borrowing. So far inflation has confined itself to stock markets, both Janet Yellen head of the FED and Christine Lagarde at the head of IMF, are both worried. They should be.

http://www.usatoday.com/story/money/business/2015/05/06/yellen-lagarde-conversation/70886172/

Banks and governments on bond buying sprees see more money to be made at the casino of the stock markets, than productive investment in the real economy on austerity shakedown.

With growth rates in Europe and US at close to zero in spite of QE, stock values have reached virtual heights inflated by QE  without reference to the disappearing real economy.bubbles

http://www.inflationomics.com/article.php?article=Keeping+Interest+Rates+Low

Bubbles are required to support the fungible inflation of stock prices and to keep  real economy and the shadow economy in business.

In Ireland, the real economy has been pillaged and looted  replaced by a virtual financial services driven economy dictated by  banks, government economic management committee, IMF and ECB and European Commission. Health care and education are under real attack and declines in services becoming more pronounced.

Developing in Orwellian Big Brother fashion Europe gains day by day more of the features of the defunct USSR in its relationship to satellite states with shots called by Germany leading inner core nations against outer core interests.

The lofty pricing model of property during Celtic Tiger years is being kept in place by banks and financial institutions to protect their asset base.

Shortages induced by NAMA and lack of investment in construction through induced shortages, has falsely inflated property prices. If property prices drop,  lending institutions on a knife edge regarding the servicing of their lending into the economy, face danger of default.

Banks now depend on a false bubble in the housing market!

The real economy with resources and assets siphoned out to pay eg extortionate variable rate interest rates and service unsustainable lending, is victim of the bubble.

Young people are priced out of the prospect of owning their own home. The future is ill- omened with imminent prospect of vulture fund acquisition of large housing stock and future extortionate rental rates driving serfs to emigrate.

In the US PE price of stock by valuations by share continue to rise to bubble levels.

According to Robert Schiller of Yale, stocks are very overvalued (markets extremely overvalued). Currently US stock market should be 50% of the size of the economy instead it is valued over 150-180%.

Margin debt, the economy divided by the amount people have borrowed to bet on stocks and shares, as percentage of the real economy, is at an all time high. Internals are weakening eg earnings are lower. Middle class is disappearing as wealth is more and more funnelled upwards where it lies dormant and unproductive. Unless spent on financial paper bubbles.

So far the shadow economy of derivatives has fuelled an internet bubble, and fuelled the 2008 crash. An ineffective Dodd Frank pr stunt has failed to curb excesses of the financial services industry through lack of regulation, QE has provided more fuel for the shadow economy dragon, to create more bubbles of fire.

Since 1970 the derivatives industry and the shadow banking economy have grown to estimated  $1.2 quadrillion: 20 times the size of the world economy. Its estimated that the world’s annual gross domestic product is between $50 trillion and $60 trillion..

2008 Lehman’s was a bank scapegoat for problems in the financial services industry. The Wall Street Crash of 2008 was executed by Lehman’s. But the real cause exploited by Lehman’s was lack of regulation. Remove opportunity and end the crime.

Bloating TBTF banking, burgeoning, bubbling. smoking, fire spitting dragon of unregulated out of control bush fires of the derivatives market, controlling, manipulating the shares market, welcome to Casino investment banking.

Instead of tackling the dragon, through austerity taxpayers are sacrificed to it; its worst excesses are refuelled to generate more havoc.

Lack of regulation of investment banking stocks and  gambling in shares led to the market crash of 1929. We are heading there again.

The problem is lack of regulation of the financial services industry now overwhelming  the real economy to the point where we no longer have a real economy, but a virtual one driven by virtual paper.

This is leading to a currency crisis. Triggers are in place. In Europe we have not only a Lehman’s, Greece, but we have sub prime lending and a bankrupt country whose extend and pretend prospects  fast running out.

 http://www.inflationomics.com/article.php?article=Keeping+Interest+Rates+Low

Forget all this ‘improving competitiveness’  emanating from EU and Central Banks across the world. Its only a mask for austerity and a cover to conceal the real problems effecting the global economy. If you want to improve competitiveness, dismantle the shadow economy and its financial services industry. Strict regulation of a gold standard to bring about stability and real growth.

Brexit and Grexit  loom  prospecting  imminent financial collapse of the euro under Europe’s QE race to hyperinflation. Germany should know better.

Werner Hoyer President of the EIB in an introduction to the European Investment Bank paper, begins well:

http://www.eib.org/attachments/efs/restoring_eu_competitiveness_en.pdf

“Europe’s competitiveness and long-term, sustainable growth potential suffer from a history of underinvestment in important areas, inefficient and fragmented financial markets, and institutional barriers. Seven years of crisis have undermined confidence, lowered aggregate investment, and further aggravated structural investment gaps. At the same time, limited fiscal space and the necessary regulatory response to the banking crisis are significantly limiting the ability of Member States and the European banking sector to take risks and catalyse valuable investment. ”

Thereafter, the paper rolls out a call to action with significant investment in key areas. But this paper fails to address the matter of problematic financial markets. Perhaps its been redacted.

The geopolitical interests of certain dominant inner core members at expense of the interests of outer core members, lets not delve into who will get the lions share of such investment.

Over and over we get these pious declarations of intent to fix  financial markets, but nothing concrete emerges.

Problems in the euro area are not due to under investment, nor will they be solved by over investment.

Problems are due to ‘  limited fiscal space and the necessary regulatory response to the banking crisis are significantly limiting the ability of Member States and the European banking sector to take risks and catalyse valuable investment ‘

Throwing money at the problem of under investment won’t cure the problem. The above paper names the problem but does not address it.

Let me try to put back and catalyse into that paper a missing chapter.

Both Janet Ellen and Nobel Laureat Schiller are aware of the problem. Stocks are overpriced. Property markets are overpriced.

Eventually this bubble in stock market pricing will turn into a bear market that will have to be controlled by a new financial formula to replace the low interest rate and QE formula that has led to the present bubble in stocks and property prices.

This may end in a global currency crash if matters continue to deteriorate as they have so far.

Low interest rates or negative interest rates cannot last forever.

http://www.bloombergview.com/quicktake/europes-qe-quandary

Market forces will eventually exert gravitational pull on bubbles bursting them. QE has generated bubbles, little else.

http://www.cnbc.com/id/102659042

Grexit is one such bubble  waiting to be cauterised. Its origin lies in the design of the euro itself with self regulation the norm. Its domino effect can bring the house down. For Greeks the choice is between accepting dictatorial austerity or some form of proto Icelandic Grexit.

Both these Hobson choices have an extremely negative side for the euro.

Future of the euro is on the table. Excision of the whole systemic economic failure of the euro, should be on the cards.

Failure to unwind the problems that have given rise to Grexit and Ireland’s massive default, should be of grave concern.

Lower interest rates and tax cuts wreaked havoc in Europe in the years following its inception when stability and growth pacts were watered down if not totally ignored:

https://www.ecb.europa.eu/pub/pdf/scpops/ecbocp129.pdf

“While the latest reforms go in the right direction, it is far from clear whether they will be sufficient to ensure sound fiscal policies. The envisaged common approach to stronger domestic fiscal rules is insufficient, and it is unclear whether countries will make meaningful changes to domestic arrangements. Under the preventive arm of the revised framework, the monitoring of expenditure will probably play only a secondary role. The proposed stronger focus on developments in government debt under the corrective arm is welcome, but the precise nature of the debt rule raises doubts as to its effectiveness. It is also questionable whether the changes adopted in order to strengthen statistical governance will be sufficient to prevent misreporting in the future, as experienced especially by Greece. Most importantly, the new provisions still leave a considerable degree of administrative and political discretion at each stage of the process. All in all, the changes envisaged do not represent the “quantum leap” in the euro area’s fiscal surveillance which is necessary to ensure its stability and smooth functioning.” (note this from 2011…no real progress since then)

As the real economy declines due to massive private and public over borrowing, the prospect of massive unwinding and fallout whether through sub prime lending collapse, or massive default in Grexit, looms.

Debt is the modern dragon stalking the land and burning all before it.

Problems besetting the eurozone in the past have now been repeated with QE. Massive government bond buying programme inflating the money supply can only encourage irresponsibility making governments prone to throwing financial investment down the drain as eg in Ireland’s ill judged and disastrous Irish Water setup disaster for Irish taxpayers.

To stimulate the US economy trillions were thrown at banks and financial institutions hoping to kickstart the economy and save it from depression. Many argue the experiment has been a success but  results are not in and omens  not good. Now the eurozone has joined the party printing money hoping to kickstart economic growth. Japan and UK have already gone down this route.

http://research.stlouisfed.org/publications/review/13/01/Fawley.pdf

“A remarkable consistency among the monetary expansion policies of all four central banks is that while all measures led to sharp increases in the monetary base, none led to sharp increases in broader monetary aggregates (see Figure 4). The broader aggregates did not increase because banks voluntarily held the increased monetary base as bank reserves—safe, liquid assets in high demand during periods of economic uncertainty”

“For example, this article details the circumstances under which the ECB and BOJ generously lent money to banks to inject reserves into their bank-centric economies, but the Fed and BOE injected reserves into the U.S. and U.K. economies by purchasing bonds.” The question of the retrospective capitalisation of Irish banks and failure to qualify for such lending to pay for the loss suffered by taxpayers re Anglo is a failure of government that will not be dealt with here.

The experiment has led to the curious anomalous rich growing richer while the poor urged to competitiveness under the flag of austerity have grown poorer.

Stocks and shares in a bull market have hit astronomic heights while at the same time market share, purchasing power in an indebted population have decreased. This shows the financialisation of the global market place has become out of kilter with the real market place. Anxious remarks of Christine Lagarde to Janet Ellen regarding the policy of the Fed to lower interest rates leading to stock market bubbles….

How are we doing locally here in Ireland. Well, banks have returned to profit by raiding those unfortunate enough to have been fleeced and forced to take out a variable rate mortgage with them over the past number of years. Banks borrow from ECB at 2% approx and lend out at 100% profit to fleeced property owners.

Are banks lending into the real economy, no!

Money that could be spent in the local economy is sucked from the banks out of the domestic economy to pour into the black hole of bank losses.

Absurd rents, high value property, fears by banks the bull run is over and they won’t lend for such prices! How could they, with high rents how can young couples save 20% of €400,000 which is €80,000 and pay back an extortionate mortgage set at 4.7% interest rates with nothing left over to be spent in the real economy. This so-called real economy becomes more absurd by the day.

You guessed it, the financial system we live under has turned into a crazy bubble in need of immediate lancing. Financial sector want it fuelled.

It needs to be lanced before further damage and political, civil strife ensue.

In Ireland, according to the Irish Times ‘Rich List’, April 26, the Dunne family, owners of the retail chain, have entered the billionaires club. This must be on foot of their zero hour contracts provoking mass strike action from its workers. Even pilots at Ryanair are on these infamous contracts that profit at expense of uncertainty and exploitation of their victims.

http://www.wsj.com/articles/u-s-stock-futures-rise-1430914380

Its clear fallout from 2007-9 and Ireland’s financial crash has meant the buck to pay for it has successfully been transferred off the shoulders of the rich via austerity onto the shoulders of the poor. We are not alone in such trends.

Steps to even the balance however small need to be taken. One small step would be to legislate against tax exiles who exploit laws to have dual residency via off shore accounts and Ireland. Figures like Dennis O Brien and Bono avoid Irish taxes because of their tax exile status while sick people cannot obtain a hospital bed in an evermore compromised Irish hospital system.

Such tax exiles should have their passports removed and be forced to pay taxes in their country of real domicile. A government tax strategy group has recommended: “there should be a “place of abode” test and a “centre of vital interest” test, According to the report, this would mean taxing individuals based on where their main economic activity is rather than where they reside.

A judgement based on a percentile measurement of what weight to give to “place of abode” and “centre of vital interest” should be made by Irish tax authorities. Those who flout such laws should have their passports removed and exiled.

This would prevent exploitation and looting of economies to serve the interests of the rich. It would criminalise such activities.

The question is can an economy re-engineer itself from the ground up to pay back its debts and not impose severe and growing austerity on its citizens.

Curiously there are no plans available for public scrutiny of such plans see below. Indeed. eurozone leaders have been adamant Greece must produce such plans fortwith, but still we have none. We do not know the detail of what austerity measures are being considered.

http://greece.greekreporter.com/2015/02/05/new-government-overhauls-greek-tax-system/

On the one hand, there is a tiered society with insiders holding the reins of power who do not want to lose their position. On the other hand, there is the squeezed middle who cannot give anymore. There is also the growing numbers of the severely impoverished.

Some argue it may be the time for Greece to remove itself from the EU and negotiate a better deal with its debtors. The benefits of such a deal are autonomy vs growing Big Brother control of the economy led by the troika. Time for Greece to do an Iceland.

Repercussions of a Grexit could be huge. Bond yields, negative interest rates, massive default … Will a Greek exist burst the current global bubble?

http://www.ft.com/intl/cms/s/0/ccd73f38-ec2f-11e4-8604-00144feab7de.html#axzz3YWLpw22u

Big Brother of financial interests is growing more autocratic and dictatorial by the day:

“Greece’s dire financial position is forcing euro zone authorities to look beyond
Mr Varoufakis to Alexis Tsipras, prime minister, much like in February when Jeroen Dijsselbloem, the Dutch finance minister who chairs the Eurogroup, brokered an extension of the current bailout programme.”

“According to two eurozone officials, Mr Dijsselbloem phoned Mr Tsipras from Riga in an effort to mend fences after Friday’s feisty eurogroup meeting, where Mr Varoufakis was rounded on by his eurozone colleagues.
In a sign that Mr Varoufakis’s combative approach is prompting concern in Greece as well, a senior Athens official said the Riga meeting was likely to lead to him being sidelined as Mr Tsipras and his deputy Yannis Dragasakis take a more hands-on role.
Amid the acrimony, differences over a new list of reforms that is to be agreed by Athens were barely discussed at the meeting, putting off indefinitely a deal to unlock access to the funds left from Greece’s €172bn bailout.”
“All the ministers told [Mr Varoufakis]: this cannot go on,” said Luis de Guindos, Spain’s finance minister.”

In such a situation calls to competitiveness are a hoax. Some debts cannot be repaid.

Lancing of global financial markets and decoupling of banks and financial services interests from politics with politicians willing to tackle the dragon required.

Financial markets are rumbled and they must be fixed. The growing threat posed by derivatives and the shadow banking sector need to be fixed. The world economy needs more sustainability than that provided by bubbles.

We do not even have proposals on the table from a global currency think tank to examine and report on problems in the global economy.

Perhaps Greece will be in Grexit the dose of reality that will cure the real problems in financial markets.

If not Grexit, then Euxit followed by a global currency run by Big Brother.

With zero interest rates and tax on any remaining  money,  its hide your money under the mattress time again. At least until hyperinflation hits.

 

till again

 

Postscript

Turns out you are not one of the inner circle unless you have appeared at the Banking Inquiry, did your Mea Culpa, and bounced through the limpid questioning with the requisite, prepared, obfuscations and denial of responsibility.

Perhaps more political show casing and hand washing can be avoided if the committee contain themselves to just one question:

“Do you know who put forward the proposal of ‘The Guarantee’.

Has that question ever been asked of anyone before the banking inquiry?

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