A Conspiracy I believe in, and it is happening right now!

squod

gizmo wrote: »

Well whether you want to accept it or not, letting Anglo fail would have caused a run on AIB and Bank of Ireland. If you either can't admit that or understand how catastrophic that would have been, then there's little point in carrying on the debate.

Humour me. Tell me why people with a similar views to me and every second economist I hear speaking on the subject are wrong. Poxy little banks like Anglo fail often enough in different countries around the world.

gizmo

squod wrote: »

Humour me. Tell me why people with a similar views to me and every second economist I hear speaking on the subject are wrong. Poxy little banks like Anglo fail often enough in different countries around the world.

In the first case, a possible lack of economic knowledge or a desire to have more reasons to knock the government despite there being plenty of other valid ones to use in it's stead.

In the economists case, well like many topics in here, for every expert you find which supports your opinion, there will be other equally notable experts which do not. The difference is, these economists will actually debate the issue rationally, as they did around the time the bank guarantee was issued, rather than labeling the government in such hyperbolic terms as "treasonous" and, in worse cases as shown in that ridiculous AH thread, calling for them to be overthrown and/or murdered.

squod

gizmo wrote: »

In the first case, a possible lack of economic knowledge or a desire to have more reasons to knock the government despite there being plenty of other valid ones to use in it's stead.

In the economists case, well like many topics in here, for every expert you find which supports your opinion, there will be other equally notable experts which do not. The difference is, these economists will actually debate the issue rationally, as they did around the time the bank guarantee was issued, rather than labeling the government in such hyperbolic terms as "treasonous" and, in worse cases as shown in that ridiculous AH thread, calling for them to be overthrown and/or murdered.

This is all BS. Reread the OP

The last time I checked there was a harp on the front of my passport, not a picture of Michael Fingleton

The debate is over this is what's happening now. Whether you want to accept it or not. Politicians broke the news to the people gently, piece by piece over time as politicians do. The result of it all is that we now own a sh1t load of private debt when we clearly shouldn't. If you can't admit that to yourself, too bad.

gizmo

squod wrote: »

This is all BS. Reread the OP

I did read it, I even agreed with much of it and replied to it, receiving a thanks from the OP along the way. This was followed up by an exchange in which we agreed on some points and clearly disagree on others. The disagreement was based on the CT that we were deliberately being sold out by the government and at the center of this was that Anglo should have been let fail. This has been pointed out by many to be untrue by many people which is what we're now debating. While it is, technically speaking, economic debate, it's no different than discussing the structural integrity of the WTC as part of the 9/11 CT.

constance tench

constance tench

FEES PAID by the Government and the Financial Regulator to outside consultants for advice sought since the banking crisis began in the autumn of 2008 have risen to well in excess of €17 million.
The Department of Finance has disclosed that some €1.4 million has been paid to investment bank NM Rothschild this year for financial advice on resolving the problems within the banking sector.

http://www.irishtimes.com/newspaper/frontpage/2010/0629/1224273558461.html

Defaulting on Anglo bonds not an option, says Goldman Sachs chairman

http://businessetc.thejournal.ie/defaulting-on-anglo-bonds-not-an-option-says-goldman-sachs-chairman-2010-09/

gizmo

constance tench wrote: »

http://www.irishtimes.com/newspaper/frontpage/2010/0629/1224273558461.html


http://businessetc.thejournal.ie/defaulting-on-anglo-bonds-not-an-option-says-goldman-sachs-chairman-2010-09/

My only issue in all of this is the clear conflict of interest with Goldman Sachs in all of this. Due to their actions on behalf of their clients, their services should not be retained by the government for advice, no matter how experienced they are.

Mahatma coat

http://www.rollingstone.com/politics/news/12697/64796

A Decent article about Goldman Sachs, tis a bit odd alrite init, Bailing out the people who caused he mess, that'd be the advice y'd get :rolleyes:

Yitzhak Rabin

gizmo wrote:

Not letting Anglo fail has been explained countless times, continuing to go on about it shows that either you're not listening or you don't understand it, neither of which are particularly valid excuses.

gizmo wrote:

Well whether you want to accept it or not, letting Anglo fail would have caused a run on AIB and Bank of Ireland. If you either can't admit that or understand how catastrophic that would have been, then there's little point in carrying on the debate.

Maybe its neither a case of people not listening or not understanding. Perhaps people just disagree with you. Comparing it to the 9/11 conspiracies is daft as well. There are economists who I greatly respect, who hold the same view as me re: Anglo. Joseph Stiglitz is one such economist. A nobel prize winner, and former vice chairmain of the world bank.

Read what he has to say about Anglo. While you are at it read people such as Dr Morgan Kelly of UCD, former Organisation for Economic Co-operation and Development chief economist Simon Johnson, world-renowned international financier George Soros, economists David McWilliams and Constantin Gurdgiev. What do all those people have in common, apart from their opposition to the way the government is dealing with Anglo, and the NAMA process. They were also the same economists who were warning us of the impending crash, and were dismissed as begrudgers and trying to "talk down the economy".

So don't be so arrogant as to assume that your opinion is the only one to hold, and anyone who disagrees, is either ill-informed, or just not listening to you. Perhaps, they are just divided on the issue, like the entire economic academic community.

As for the run on the banks. Why do you think a guarantee of BOI, AIB, and Anglos depositer would not have prevented a run on the banks in the same way as a guarantee that includes the senior bondholders of Anglo?

gizmo

yekahs wrote: »

Maybe its neither a case of people not listening or not understanding. Perhaps people just disagree with you. Comparing it to the 9/11 conspiracies is daft as well. There are economists who I greatly respect, who hold the same view as me re: Anglo. Joseph Stiglitz is one such economist. A nobel prize winner, and former vice chairmain of the world bank.

Read what he has to say about Anglo. While you are at it read people such as Dr Morgan Kelly of UCD, former Organisation for Economic Co-operation and Development chief economist Simon Johnson, world-renowned international financier George Soros, economists David McWilliams and Constantin Gurdgiev. What do all those people have in common, apart from their opposition to the way the government is dealing with Anglo, and the NAMA process. They were also the same economists who were warning us of the impending crash, and were dismissed as begrudgers and trying to "talk down the economy".

So don't be so arrogant as to assume that your opinion is the only one to hold, and anyone who disagrees, is either ill-informed, or just not listening to you. Perhaps, they are just divided on the issue, like the entire economic academic community.

My bad, I didn't mean to ignore the possibility of logical disagreement, my beef is more those people who don't even consider it. The above professionals are able to give an accurate assessment about why it may not have caused the run and that's fair enough. On the other hand there are those who simply scream conspiracy and that the government were out to save the bankers skin without even considering the side effects. That kind of baseless ranting helps no one unfortunately.

yekahs wrote: »

As for the run on the banks. Why do you think a guarantee of BOI, AIB, and Anglos depositer would not have prevented a run on the banks in the same way as a guarantee that includes the senior bondholders of Anglo?

Well historically senior bonds have always considered to be on the same level as deposits, hence their inclusion in the guarantee. There is still the question of those senior bonds which were not included and I fully expect Lenihan to eventually agree that they should have to take a hit too. As for whether it this will cause a run, no I don't think so. Only fully reneging on the guarantee would come close to that level of damage, of course that didn't stop Moody's from downgrading them a few weeks ago.

Mahatma coat

Ah But, considered the Same as Deposits != Deposits.

Bonds are an INVESTMENT, now it may have ben considered a 'Safe' investment, but its a Gamble none the less.

Why should we Guarantee these peoples Gambles.


AND IMO a Run on some of the banks might be what the country needs, the short sharp shock and the restructurng that would have come about after it would be in place now and the country might have smething resembling a functional financial sector.


NEXT QUESTION Gizmo

if the Bailouts were to maintain the lines of credit nescessary to keep SME's afloat, why are the banks point blank refusing to lend to these businesses, instead usin the money to prop up bigger clients and other financial houses???

squod

There was talk of a partial bailout of depositors in Anglo. Up to a max of €200,000. Sensible plan IMO.

gizmo

Mahatma coat wrote: »

Ah But, considered the Same as Deposits != Deposits.

Bonds are an INVESTMENT, now it may have ben considered a 'Safe' investment, but its a Gamble none the less.

Why should we Guarantee these peoples Gambles.

Quite true, they're not equal however that is how they have been regarded up until this point. As I said though, it looks like the non-guaranteed ones will be taking a hit. That being said of course, the guarantee runs out in December so it should be interesting to see what happens then.

Mahatma coat wrote: »

AND IMO a Run on some of the banks might be what the country needs, the short sharp shock and the restructurng that would have come about after it would be in place now and the country might have smething resembling a functional financial sector.

I simply can't agree that a run on the banks would be good for anyone. People's savings would be wiped out, businesses would have less places to look for credit and we'd have even more people out of work.

Mahatma coat wrote: »

NEXT QUESTION Gizmo

if the Bailouts were to maintain the lines of credit nescessary to keep SME's afloat, why are the banks point blank refusing to lend to these businesses, instead usin the money to prop up bigger clients and other financial houses???

That was one of the reasons given for the bailout and, to a certain extent it has succeeded. Sure they more picky about who they extend such credit to but I think such caution is needed given the reckless lending which occurred previously. As for propping up bigger clients, well big clients are big employers so not only does it it makes sense to ensures they are looked after but it also ensure Ireland keeps it's reputation as a good location for other such companies to set up.

digme

gizmo what system do you follow as it's not capitalism.

gizmo

digme wrote: »

gizmo what system do you follow as it's not capitalism.

Er, what?

I can only assume you're making a somewhat cryptic reference to the idea that not letting Anglo and co fail is somewhat counter to the capitalist system. The answer is simple however, Anglo was of systemic importance to the economy, at least in the opinion of those who believe allowing it to fail would have a wider reaching effect, and as such this couldn't be allowed happen.

Outside of the country, it's not like we're the first to take such measures. The US, the bastion for the capitalist system worldwide took similar measure with both the banking and auto industry. Either way however, this has nothing to do with the CT here so I don't know why you want to bring it up?

squod

gizmo wrote: »

Anglo was of systemic importance to the economy,

No it wasn't/isn't.

gizmo wrote: »

in the opinion of those who believe allowing it to fail would have a wider reaching effect, and as such this couldn't be allowed happen.

We've already bailed every other bank in the system. The system would hardly have collapsed in that case ( given a limited guarantee of Anglo's deposits ). The people who issued the ?report said, when asked directly if the system woulda failed if Anglo wasn't bailed, said they didn't know what the outcome would be if Anglo wasn't bailed.

gizmo

squod wrote: »

No it wasn't/isn't.

Well that's what's under debate isn't it, one side says it was due to the sheer size of the debt and the affect it would have on the rest of the industry if it went under while the other side disagree on the latter point and hence the assertion it was systemic. The difference being, those educated in the finer points (I don't include myself in this category in any way btw) who disagree with it won't then follow it on with CTs.

squod wrote: »

We've already bailed every other bank in the system. The system would hardly have collapsed in that case ( given a limited guarantee of Anglo's deposits ). The people who issued the ?report said when asked directly if the system woulda failed if Anglo wasn't bailed said they didn't know what the outcome would be if Anglo wasn't bailed.

We've bailed out every bank who had significant property dealings but yes, the rest of the point still stands. Which report are you referring to though? As for what they said, well that again is the point, it was not definite what would have happened but the government evidently didn't want to take the chance, hence the decision to go ahead with the guarantee and bailout.

Anyway, this is still off-topic. To get back on-topic, does this look like they're all looking out for each other?

K-9

squod wrote: »

No it wasn't/isn't.

At the time it was guaranteed and nationalised, it was. It should never have been, but it was.

Remember at one stage its share value was more than AIB and BOI. Think it might have gone over €30 a share at one stage. It was making massive "profits", so much that AIB and to a lesser extent BOI, copied them.

It never should have had 90% of its loan book in property speculation but there you are. I think people see it as a builders bank and think it musn't have been that big, it was huge!

It had borrowings from the main Irish banks, the Irish Central Bank and the ECB, far more that the bondholders everybody is giving out about.

At the time it was Nationalised AIB and BOI share were virtually worthless and were days away from going bankrupt. This wasn't some small American bank in a couple of states, unfortunately.

Making a drastic decision like just letting it fail would have had enormous consequences for the rest of the banking system and the economy. You could argue they did the wrong thing, but it definitely was systemic.

I would say it isn't now and it needs to be wound up in an orderly and the most cost effective way. The markets, bad and all as they are, aren't near the chaos that was 2 years ago.

constance tench

And the big difference is that while NAMA was entirely a State agency, this SPV will have a majority of private owners. Private investors will have 51 per cent of the equity of this SPV and the State, via the hapless NAMA, will have just 49 per cent. The 51 per cent owners will call the shots, decide what is to be done with the assets for which we, Irish citizens, are harrowing €54 billion.

How this could be constitutional is beyond me.

And then there is in Section 56 an exquisite gagging clause. No criticism of government policy or of the Ministers will be permitted by officials of NAMA.

http://politico.ie/index.php?option=com_content&view=article&id=5998:brian-lenihan-sidelines-nama-with-special-purpose-vehicle&catid=224:tonight&Itemid=664

squod

gizmo wrote: »

Well that's what's under debate isn't it, one side says it was due to the sheer size of the debt and the affect it would have on the rest of the industry if it went under while the other side disagree on the latter point and hence the assertion it was systemic.

That debate was created by the government. As I said earlier people were drip fed the bad news piece by piece, as governments do. Knowing very well what the end figure would be. Even if the private debt could cause such problems within the system (mostly builders loans remember) the problems of paying off all that debt while in a recession was a much bigger gamble.

gizmo wrote: »

Well that's what's under debate isn't it, one side says it was due to the sheer size of the debt and the affect it would have on the rest of the industry if it went under while the other side disagree on the latter point and hence the assertion it was systemic.

Anyway, this is still off-topic. To get back on-topic, does this look like they're all looking out for each other?

Yes. The very fact that Drumm is in America and not in jail in Phibsboro proves that.

gizmo

squod wrote: »

That debate was created by the government. As I said earlier people were drip fed the bad news piece by piece, as governments do. Knowing very well what the end figure would be. Even if the private debt could cause such problems within the system (mostly builders loans remember) the problems of paying off all that debt while in a recession was a much bigger gamble.

Several independent economists and observers have said the same thing though, it wasn't just the government. Hell even good 'ol K-9 above said it.

squod wrote: »

Yes. The very fact that Drumm is in America and not in jail in Phibsboro proves that.

So what law did he break in Ireland that could have led to him being arrested?

squod

gizmo wrote: »

So what law did he break in Ireland that could have led to him being arrested?

There is an allegation of share support when the bank lent money to 10 customers to buy shares in the company in July 2008.

There was also the transfer of €7 billion between Anglo Irish Bank and Irish Life Permanent which was designed to flatter Anglo Irish’s balance sheet.

Thirdly, there were loans totalling €87 million that former chairman and chief executive Seán Fitzpatrick concealed from shareholders.

Those three for a start I'd say.

He explained it would have to be proven beyond reasonable doubt that those involved in the bank at the highest level had malice aforethought in taking the actions that they did. Anglo Irish Bank is being investigated on number of issues.

Linky

gizmo

squod wrote: »

Those three for a start I'd say.

Linky

Ah excellent, thanks for the link! Well then, let's hope they get what's coming to them then. White collar criminals in the US have seen jail time so there is no reason why the same cannot happen over here. I understand, as Ahern said, that it will be difficult since I'm sure some of these guys covered their tracks well, but with the kind of evidence alluded to in the article, they should have a damn good chance.

Yitzhak Rabin

It seems the bondholders are going to be hit harder than I expected.

Fairplay, it seems finally they are going to do the right think and make them accept their gamble lost.

http://www.ft.com/cms/s/0/6f3a949e-dd4b-11df-9236-00144feabdc0.html

Financial Times wrote:

The bank is offering holders of some of its outstanding junior debt to swap their notes, which are due for repayment in coming years, for new Irish government guaranteed bonds. The move will lead to losses of at least 80 per cent of face value for some bondholders.

Holders of some perpetual bonds that have no fixed maturity date face even greater losses – they are being offered just five cents in the euro.

The bondholders will be asked to vote on the proposal at meetings starting from November 19. The meetings require about two-thirds of creditors to attend and of those attending, three-quarters to vote in favour. If approved, it will allow the bank to call back outstanding bonds that have not voted in favour at just one cent in the euro.

Its definitely a step in the right direction, 2 Bn less we have to put into the blackhole.

I have more to say about this, just need to read a bit more....

K-9

yekahs wrote: »

It seems the bondholders are going to be hit harder than I expected.

Fairplay, it seems finally they are going to do the right think and make them accept their gamble lost.

http://www.ft.com/cms/s/0/6f3a949e-dd4b-11df-9236-00144feabdc0.html


Its definitely a step in the right direction, 2 Bn less we have to put into the blackhole.

I have more to say about this, just need to read a bit more....

I suspected as much was going on, they just didn't want to publicise it too much.

It's only a small part of the problem, but it's a start. The senior bondholders seems a harder one to deal with as deposits seem to be tied in with it, on a legal basis.

constance tench

The total assets under management which I was able to compile from publicly available figures is €20,871,150,000,000. That is an underestimate because the bond holders who turn out to be Private and Swiss banks don't publish any figures. So Anglo Irish's 'bond holders' hold and invest MORE than 20.8 trillion euros. Guido lists those bond holders as holding between them 4 Billion euros in Anglo Irish bonds.


.... Certainly my figure is a large underestimate. But taking them at face value Anglo Irish would account for an one 5000th of the total assets being managed by all the bond holders. So would even a total default by Anglo Irish cause that much, let alone systemic, pain and risk? Why are the 'Bond holders' and the Irish government so concerned that the Irish people be forced to take the loss and pay the debts for them?

Now lets look at the other side of the equation, at Ireland itself. Well Ireland's GDP before the crash, in 2008, was ... drum roll please... €207 billion. Or 0.207 trillion.


SO.... on one side we have Ireland whose bond holders, its people, have between them a total GDP wealth of 0.207 trillion euros. Who are being FORCED, against their will, to pay Anglo Irish bank's debts to its bond holders, who between them hold 20.8 Trillion euros. The people of Ireland are paying to, and protecting the wealth and power of, people who have 100 times more wealth!


So where do these wealthy bond holders live and work?


Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
Britain is third with 9 who have around 3 trillion.
The Swiss have 6 but who have about 8.5 trillion.
America has only three and hold only a trillion.
Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.

So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals.

To give you an example, one of the private banks is EFG Bank of Luxembourg.
EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is 'mostly', 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.


Now there is absolutely no suggestion that Mr Latsis has ever done anything wrong or illegal. And his holdings are, I am quite sure, perfectly legal and above board. But when we talk of Anglo Irish's bond holders it is Mr Latsis and those with his sort of wealth who we are talking about NOT widows and orphans or you and me.

It is therefore worth remembering, the next time an Irish politician, or any of our politicians for that matter, say that some welfare payment can no longer be afforded, it is because the money that could have paid for it has been given to the bond holders, people not unlike Mr Latsis, instead. The Irish people are paying and protecting the interests of people like Mr Latsis over the interests of their own children. And it is their own politicians who are doing this.

http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-bailing-out.html

joebucks

constance tench wrote: »

[/LEFT]


http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-bailing-out.html
[/LEFT]

Spiros Latsis is best buds with Barroso(Bilderberger) so wouldn't be suprised at all if these lads were the reason we are keeping Anglo propped up.

BumbleB

The day the gold standard was abolished was the genesis for all this stuff happening , as governments could manipulate the money supply any way they wanted .That is why people have descended into debt.

Misanthrope

gizmo wrote: »

So what law did he break in Ireland that could have led to him being arrested?

Most likely none,which is why this country needs a ground-up rebuild.Then we can make sure that it is a violation of our law to do the things they've done.

gizmo

Misanthrope wrote: »

Most likely none,which is why this country needs a ground-up rebuild.Then we can make sure that it is a violation of our law to do the things they've done.

It was pointed out in the very next post that he had in fact broken laws.