Morgan Kelly's Latest...

murrayp4

I have to say, this is a rather scary/depressing summation of our current and future situation...

The_Honeybadger

He doesn't do sugar coating does he!! That is scary beyond belief, especially since he admits we are beyond a solution at this stage and now merely waiting for the inevitable.

jank

Think he is going a little too far at the end. I cant see a hard right party emerge at all Maybe he should stick to economics and stop trying to be Niall Fergusan.

On the economic side though, spot on. We are now at the hands of the EU.

dkin

We're too small that's the problem. We'll be regarded as the equivalent of the wized drunken man at the bar talking about his past glory days and held up as an example to others having lost everything.

Unfortunately we are welded to a system that is operating in a completely different dynamic and in very different circumstances. Comparing Ireland to Germany or Frrance is like comparing chalk and cheese. Unfortunately over the last number of years we have had access to markets and money that should never have been open to a country like Ireland. It was like giving the platinium credit card to a spoilt, insecure, spendthrift schoolgirl, letting her have free reign in the most expenisve boutiques and shops buying baubles and trinkets for inflated prices and then demanding she work it off doing manual labour over many years. It should never have happened. In exchange for a bailout they'll extract their pound of flesh which more than likely will be our corporation tax and that's all this country has.

The debt burden is simply too big to repay without devastating effects especially if we are forced to change our corp. tax as this is the only thing keeping the big american multinationals in Ireland. We will be properly punished for this disgraceful mismanagement and incompetence. I completely agree with that approach as we must learn to stop believing our own ****e and accept our reality as a small island nation with no natural resources and absoloutely no entitlement to anything but that which is gained through labour, intelligence, humility and hard work. All in short supply in recent times.

Sticky_Fingers

We had an out and just because our glorious leaders didn't want to be seen to fail we have lost it. ECB/IMF bailout is IMO inevitable, the markets don't believe us, Europe doesn't believe us and more importantly we don't believe us.

The only hope we have in negotiating terms in the final capitulation of our nation is to throw caution to the wind and threaten to go nuclear on the Euro, either they help us out at reasonable terms or we tell them to shove it up their boxy and scuttle the whole lot of us. We are in the water and should not be afraid of pulling the very institutions (and their respective governments) in with us after we risked and mortgaged our own and our childrens future to save their investments.

The prize in this for all concerned is our rate of Corp tax, they want it gone and we need it to remain, if we lose this then we might as well pull the plug on everyone because we as a country would be finished. While I am wary of the operating tactics of multinational corporations and big business I am realistic enough to know that we need them in this country to provide a diet of bread and water while we struggle through these harsh times and we should defend this lifeline to the bitter end.

I wonder will our leaders grow a backbone and defend the very people they are sworn to represent and protect in this time of crisis or will they continue to act like a pack of Quislings and sell their fellow countrymen down the river, reducing their charges to pauperism just for a pat on the head from their new masters.

Mister men

Why are people surprised by this stuff anymore. The delusion continues unabated in the general public i guess.

Nijmegen

Kicking the can up the road is a good analogy for Ireland - the Europeans need time and space to figure out what to do with us.

But I think the deal is sealed.

Even our 4 year budget is based on strict growth targets abroad that, well, are a 50/50 toss up for an optimist.

Anonymous1987

jank wrote: »

Think he is going a little too far at the end. I cant see a hard right party emerge at all Maybe he should stick to economics and stop trying to be Niall Fergusan.

It's a bit sensationalist but look at Europe, the legitimisation of Geert Wilders, Merkel declaring multiculturalism has failed, Sarkozy expelling Roma's not the mention the rise of the tea party in the US, just an observation of a trend.

johnboy_123

We are bolloxed as long as we have no viable alternitive to the current shower of sh1ts in government...The C.P.A should be torn up this is one of the biggest thorns to the markets etc..They see us cutting/taxing 6billion out of the economy this year and the P.S wages/numbers are not touched...Only a blind man can see that there needs to be a serious examination on this..I am not trying to turn this into a P.S bash or anything but come on everyone is being bled dry here

cson

There is one Kelly quote from about 2 years ago that really stuck with me;

The fiscal capacity of a state with only two million taxpayers, and falling fast, is frighteningly thin. Ten billion here, and 10 billion there and, before you know it, you are talking national bankruptcy . . . Nama will ensure a crushing tax burden for everyone in Ireland for decades.

gollem_1975

jank wrote: »

Think he is going a little too far at the end. I cant see a hard right party emerge at all Maybe he should stick to economics and stop trying to be Niall Fergusan.

On the economic side though, spot on. We are now at the hands of the EU.

at the moment there are no right wing parties let alone hard right parties but over the course of the next 5 years who knows what will happen... we are as the chinese saying goes "living in interesting times"

perhaps there will be a party representing the interests of the taxpayers and consumers of public services instead of or at least as well as the providers of these services.

Tea drinker

Well what really scares me is the Irish attitude to protestors.
So many people are embarrassed by other people saying it like it is, creating a disturbance etc. Would you be quiet or ye'll make de politicians and God mad! Sure if ye protest people will know we all got conned and den we will look like eejits!

If ever a country needed to protest against the Royal family it's this one.
In the meantime, throw another generation on the boats boys
We pay for a TV licence for rubbish TV, during the bubble a huge % or airtime was dedicated to Housebuying and renovation, selling for a quick buck etc. How much to dissenting voices? And we pay for this? Why does RTE consistently get questioned as to it's bias regarding the royal family?
With the resources (I mean $$$ not talent) they have available surely RTE could be bringing matters to Garda attention etc?

Practically no investigative journalism exists in mainstream Ireland, so it's not like we will get answers, or even ask the right questions.

dan_d

I don't know if I agree or disagree with him.

He makes some good points, but I'd have to query some other ones.

During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank.

Is this such a bad thing? Seriously? We obviously haven't got a clue what we're doing in financial terms - I'm pretty sure this is at least round 2, if not round 3, of bailing AIB out. Surely the legacy of having the ECB oversee everything is a good thing in terms of how Irish banks are run in the future.

It is a testament to the cool and resolute handling of the crisis over the last six months by the Government and Central Bank that markets now put Irish sovereign debt in the same risk group as Ukraine and Pakistan, two notches above the junk level of Argentina, Greece and Venezuela.
A fair point. However, I'd like to see the entire list of risk groups and who it contains. He focuses on the bad, to drive his point home.

September marked Ireland’s point of no return in the banking crisis.
Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act.
Was this common knowledge? Or is this just something he happens to "know" in order to further make his point? What other factors were at play?

The way would then have been open to pass legislation along the lines of the UK’s Bank Resolution Regime, to turn the roughly €75 billion of outstanding bank debt into shares in those banks, and so end the banking crisis at a stroke.
I would have my doubts that the solution was actually just that simple, this far into the mess. My doubts, I confess, are not based on anything concretely economic...simply on the conclusion that it took us 10 years to get into this mess, and 2 years to get absolutely mired in it.....is it really that simple to solve it overnight and wipe the slate clean for the following Monday? What other factors are at play there, what would this affect and how could it be implemented?

The German and French banks whose solvency is the overriding concern of the ECB get their money back. Senior Irish policymakers get to roll over and have their tummies tickled by their European overlords and be told what good sports they have been. And best of all, apart from some token departures of executives too old and rich to care less, the senior management of the banks that caused this crisis continue to enjoy their richly earned rewards.
The cynic in me believes every word of this.

When you apply the same assumptions about lending losses to the other banks, you end up with a likely taxpayer bill of €16 billion for Bank of Ireland (deducting the €3 billion they have since received from investors) and €26 billion for AIB: nearly as bad as Anglo.
Again a fair point. However I have highlighted the really important word in this paragraph. Assumptions. They are an extremely dangerous thing to make. I don't dispute his figures, based on those assumptions, but how do we know it's fair to apply the same assumptions? Given that Anglo aggressively chased developers and lent them huge sums while cultivating Sean F's personal relationships with them....I'm not sure exactly the same practices went on at the other 2 banks. They were by no means perfect, but I am wary of applying the same assumptions about Anglo to anything.

but the breakdown of governance at AIB that allowed it to pursue the same suicidal path.
Can we add the word "again" in this sentence, please.

First, in anticipation of being booted out of bond markets, the Government built up a large pile of cash a few months ago, so that it can keep going until the New Year before it runs out of money. Although insolvent, Ireland is still liquid, for now.
Again...is this a bad thing???

This time the bad loans will be mortgages,
The elephant in the room. Nice of one of these so-called "experts" to actually come out and say this. This problem has existed for the last 2 years, and nobody will talk about it, or account for it. It's the reason we can't raise taxes higher or drop wages. It's the reason that this is not the same as the recession in the 80s - the level of personal debt we have now. It's the reason we couldn't bring in far more savage measures 2 years ago, the reason that unions have to be negotiated with in regards to wage cuts and minimum wages. In fact, it's an underlying factor in many of the financial decisions that are being made out there at this stage, because it has to be. Hurt the people of Ireland, and you end up hurting the banks again. It's a vicious circle.

If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency
An excellent observation.

The other crumbling dam against mass mortgage default is house prices. House prices are driven by the size of mortgages that banks give out.
:rolleyes: Pity he couldn't tell all his financial pals that 6 years ago.....


Economists have a simple rule to calculate this
The absolute cynic in me has to point that many rules exist in economics, all of which were apparently ignored for the last 10 years. Suddenly they've become "the Bible" for economists again.Amazing, that.

This means that if we are forced to repay the ECB at the 5 per cent interest rate imposed on Greece, our debt will rise faster than our means of servicing it
I think we are all well aware of this by now.

My stating the simple fact that the Government has driven Ireland over the brink of insolvency should not be taken as a tacit endorsement of the Opposition.
As ordinary people start to realise that this thing is not only happening, it is happening to them, we can see anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America.
Extremely true, although he goes one step too far with the Tea Party thing, maybe!

I know this post is long, but what I'm trying to say is that while he has some excellent points, there are things in his article that should be questioned. Morgan Kelly is writing in such a way that he is basically predicting the future of Ireland. He has no more clue that the rest of us what will happen. Based on the current situation, and what has happened previously there are a number of things that are absolutes - yes, the ECB will now be keeping a far tighter eye on us, and yes, mortgages are huge problem. Yes, house prices will probably continue to fall further (though maybe not crash) and yes, the cost of the bank bailouts is huge and should never have happened.

However hindsight is 50/50 and this is what Mr Kelly applies here.He takes his hypotheses and extends them to create a fictional situation that is the future of Ireland. It may be - but then again, equally, it mightn't be.Like any good economist, he is picturing worse-case scenario. I'm not sure why - usually picturing worse-case scenario is a precursor to offering a few solutions to avoid this happening. We may have run out of solutions, but there are so many external factors, nobody can really predict what will happen.

I suppose to conclude the lecture from my soap box (:D) - don't believe (hook, line and sinker) everything you read.

thewing

He hasn't been wrong yet, but I hope he is this time...

gollem_1975

thewing wrote: »

He hasn't been wrong yet, but I hope he is this time...

Well at least he was honest and threw his hands up and the end of the article to say he had no suggestions as to how we can make this a painless process.

I don't think there was ever going to be an easy way out of this.

Its a pity the general public didn't listen to Morgan Kelly back in 06.

Pity the economists weren't more vocal in the years up to 06 when the damage was done.

The Irish times as a cheerleader of the bubble and a purveyor of property porn themselves are not blameless in this predicament.

sollar

"September marked Ireland’s point of no return in the banking crisis. During that month, €55 billion of bank bonds (held mainly by UK, German, and French banks) matured and were repaid, mostly by borrowing from the European Central Bank.
Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act. The way would then have been open to pass legislation along the lines of the UK’s Bank Resolution Regime, to turn the roughly €75 billion of outstanding bank debt into shares in those banks, and so end the banking crisis at a stroke.
With the €55 billion repaid, the possibility of resolving the bank crisis by sharing costs with the bondholders is now water under the bridge. Instead of the unpleasant showdown with the European Central Bank that a bank resolution would have entailed, everyone is a winner. Or everyone who matters, at least."

I don't remember hearing anything about this Sep date and legal option of terminating the bank guarantee.

Why Did Morgan Kelly not put his head above the parapet before september. Why is he now writing in the bloody irish times about it trying to look like the great wise man after the event. These wise men after the events do my head in, he should have been bellowing from the roof tops about this during the summer not on Nov the f***ing 8th :mad:

Laminations

sollar wrote: »

I don't remember hearing anything about this Sep date and legal option of terminating the bank guarantee.

Why Did Morgan Kelly not put his head above the parapet before september. Why is he now writing in the bloody irish times about it trying to look like the great wise man after the event. These wise men after the events do my head in, he should have been bellowing from the roof tops about this during the summer not on Nov the f***ing 8th :mad:

http://www.rte.ie/news/2010/0524/economy.html

In an opinion article in Saturday's Irish Times, Mr Kelly said the Government's September 2008 bank guarantee, if not reversed, would sink the country

Did you even look? I think you should now eat your words and apologise to Morgan Kelly

EDIT: I see you say 'these wise men'

David McWilliams on August 11th wrote:

WHEN I hear the new boss of Anglo urging the Government to extend the bank guarantee, I know the right thing to do is precisely the opposite. Put in its most simple form, what is good for Anglo is bad for Ireland

sollar

Laminations wrote: »

http://www.rte.ie/news/2010/0524/economy.html



Did you even look? I think you should now eat your words and apologise to Morgan Kelly

No there will be no apology from me, he hardly shouted about something so important did he?

When did he or any other economist make reference to this clause:

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act

jmayo

Sticky_Fingers wrote: »

We had an out and just because our glorious leaders didn't want to be seen to fail we have lost it. ECB/IMF bailout is IMO inevitable, the markets don't believe us, Europe doesn't believe us and more importantly we don't believe us.

The only hope we have in negotiating terms in the final capitulation of our nation is to throw caution to the wind and threaten to go nuclear on the Euro, either they help us out at reasonable terms or we tell them to shove it up their boxy and scuttle the whole lot of us. We are in the water and should not be afraid of pulling the very institutions (and their respective governments) in with us after we risked and mortgaged our own and our childrens future to save their investments.

The prize in this for all concerned is our rate of Corp tax, they want it gone and we need it to remain, if we lose this then we might as well pull the plug on everyone because we as a country would be finished. While I am wary of the operating tactics of multinational corporations and big business I am realistic enough to know that we need them in this country to provide a diet of bread and water while we struggle through these harsh times and we should defend this lifeline to the bitter end.

I wonder will our leaders grow a backbone and defend the very people they are sworn to represent and protect in this time of crisis or will they continue to act like a pack of Quislings and sell their fellow countrymen down the river, reducing their charges to pauperism just for a pat on the head from their new masters.

Actually maybe we will have to threaten Euro, but somehow I can never see any of our politicans going there.
Either way we are screwed.
I actually believe the Euro is doomed as you can't have one set of fiscal responsible states tied to the happy go lucky ones like the PIIGS.
It ain't possible without strict financial constraints been set at a central level.
And that is what we are now seeing.
If we want a single currency like the US then we need a more federal system like the US.

Mister men wrote: »

Why are people surprised by this stuff anymore. The delusion continues unabated in the general public i guess.

Because some people are livbing in cloud cuckoo land and would rather follow what sh**e singer is being dubbed on a TV program than what has been going on in our political and business elites.

sollar wrote: »

"September marked Ireland’s point of no return in the banking crisis. During that month, €55 billion of bank bonds (held mainly by UK, German, and French banks) matured and were repaid, mostly by borrowing from the European Central Bank.
Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act. The way would then have been open to pass legislation along the lines of the UK’s Bank Resolution Regime, to turn the roughly €75 billion of outstanding bank debt into shares in those banks, and so end the banking crisis at a stroke.
With the €55 billion repaid, the possibility of resolving the bank crisis by sharing costs with the bondholders is now water under the bridge. Instead of the unpleasant showdown with the European Central Bank that a bank resolution would have entailed, everyone is a winner. Or everyone who matters, at least."

I don't remember hearing anything about this Sep date and legal option of terminating the bank guarantee.

Why Did Morgan Kelly not put his head above the parapet before september. Why is he now writing in the bloody irish times about it trying to look like the great wise man after the event. These wise men after the events do my head in, he should have been bellowing from the roof tops about this during the summer not on Nov the f***ing 8th :mad:

Obviously you don't follow Morgan Kelly's remarks very well.
He has been one of the few who forecast this whole sorry mess.
Perhaps he didn't start shuting from the rooftops in September, but he has given adequate warnings from way back, including the days when you were advised to commit suicide by the naitons leader.

He is not one of the bandwagon jumpers, he has been driving the bloody bandwagon since 2006.

Any harm asking when you climbed aboard ?

Dannyboy83

Tell you what, I've always been pissed off that having my own house was unattainable, for the last 7 years anyway.
Even up to getting refused for a mortgage a few weeks ago by AIB, I was bitter about it, about the way it has completely disrupted my life and left me at the mercy of unscrupulous Irish landlords, no stability etc.

After reading that article, this is the first time I have Thanked God that I don't have a house.
Ireland is going to be transformed into the Zimbabwe of Europe over the next several years.

If the worst come to the worst, I can get the fcuk out of here.

Anybody who is thinking about buying a house in Ireland over the next few years, show them this article. The game is up.

ei.sdraob

September marked Ireland’s point of no return in the banking crisis. During that month, €55 billion of bank bonds (held mainly by UK, German, and French banks) matured and were repaid, mostly by borrowing from the European Central Bank.

sh1t :eek:

why would EU help us now if their banks have already pulled out and no risk of contagion, were screwed

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act. The way would then have been open to pass legislation along the lines of the UK’s Bank Resolution Regime, to turn the roughly €75 billion of outstanding bank debt into shares in those banks, and so end the banking crisis at a stroke.

anyone else feel like you just got robbed blind

gollem_1975

ei.sdraob wrote: »

Quote:
September marked Ireland’s point of no return in the banking crisis. During that month, €55 billion of bank bonds (held mainly by UK, German, and French banks) matured and were repaid, mostly by borrowing from the European Central Bank.

sh1t :eek:

why would EU help us now if their banks have already pulled out and no risk of contagion, were screwed

maybe I'm missing something here but as we have borrowed the money from the ECB to pay these banks off doesn't the EU have an interest in us giving the ECB the €55 billion back ?

cavedave

The Irish standard of living reset will go back how many years? Ten? What is non-wartime precedent for wealthy country?

Professor Tyler Cowen

gollem_1975

Dannyboy83 wrote: »

Anybody who is thinking about buying a house in Ireland over the next few years, show them this article. The game is up.

though if we are to believe one of the major points in Morgans recent article the banks probably aren't going to be lending money to people to buy housing.

You would have been doing them a bigger favour had you shown them morgan kellys article from 4 years ago.. or even better if you had linked them to the related post in the accom & property forum

Sesshoumaru

sollar wrote: »

No there will be no apology from me, he hardly shouted about something so important did he?

When did he or any other economist make reference to this clause:

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act

Are you serious? You sound like you're blaming Morgan Kelly for this mess! You should be asking why didn't FF make reference to this! or the opposition parties?

Morgan Kelly warning about the bank bailout

gollem_1975

gollem_1975 wrote: »

Well at least he was honest and threw his hands up and the end of the article to say he had no suggestions as to how we can make this a painless process.

Indeed,given that he's paid by the tax-payer and would be at the brunt of any 60% public and civil service salary cuts imposed by the IMF

Colour Tv's are going to be come a rarity in Ireland again,we won't even have the money to rent them like some rich people were able to do in the 70's...
Curry's won't be shy in throwing in the towel when theres no market for their products.They won't drop the price to a new affordable level of €20 for a 42"

John_Mc

Can't we just leave the Euro and use the conventional methods for dealing with a recession? I see no advantages of being with them - leaving the single currency does not mean leaving the EU.

As already said, if we lose our corp tax rate we're absolutely f*cked. They will have to be told where to go if they try it

ei.sdraob

gollem_1975 wrote: »

maybe I'm missing something here but as we have borrowed the money from the ECB to pay these banks off doesn't the EU have an interest in us giving the ECB the €55 billion back ?

You are missing something, the ECB with its money printing machines computers can absorb losses if needed, the average "normal" retail banks can't. At the end of the day the ECB quite literally creates money out of thin air, normal banks need deposits in order to lend x times over on the other hand.

Lets look at the wider Geopolitical picture here: US, UK and JP have all underwent and restarting quantative easing programmes in order to push down their currencies. The ECB on the other hand barely dipped their feet into it, Greece and Ireland have weakened the euro but that helps the Germans and other exporters (including some here).

The way I see it there is a point where keeping Ireland on life support becomes more expensive than bailing out banks, with the banks etc rapidly exiting from here that point is approaching fast.
I hope we get rescued Greek style. But Morgan could be right we could very well endup being made an example of to knock sense into the rest of PIGS and even the likes of France.

The Germans do not want to pay for us, they already had to put up with Greece.

tl:dr
if it costs the EU 55 billion to let us sink but more to keep us afloat, guess which option might be chosen, especially if there is a resolve to make an example in the name of austerity
were foooked

Sea Sharp

It's going to take quite a while for us to sort out this mess.
If we make the 15bn cuts, we're probably going to have to make further 3-5bn cuts due to the losses in tax caused by the 15bn cuts. That’s 18bn, then to have a realistic goal of paying back the debt over 20 years we’re going to have to cut a further 10bn from the budget.
Then we're going to have to make further cuts to begin addressing the massive debt we've accumulated over the last 2 years through Nama, budget deficits, and bank bail-outs.
I’m not entirely sure on the exact figures but 100bn debt with 5% interest would take about 20 years with 10bn a year cost.
Nama: Realistically, best case scenario they manage to sell the properties off at half the price they paid for them in the next 10 years. Property in this country still has a long way to go before the floor. And with mortgage defaults left right and centre I'm predicting that we can expect to see houses that were worth 300k selling for 20% of their peak value.
The banks will almost certainly need more bailouts, as was described in the article due to mortgage defaults.
As the article says all we can hope for is that inflation of the euro causes the rest of Europe’s cost of labor and cost of property to inflate beyond what we were at the peak of the boom.

Dannyboy83

Deleted User wrote: »

Indeed,given that he's paid by the tax-payer and would be at the brunt of any 60% public and civil service salary cuts imposed by the IMF

Colour Tv's are going to be come a rarity in Ireland again,we won't even have the money to rent them like some rich people were able to do in the 70's...
Curry's won't be shy in throwing in the towel when theres no market for their products.They won't drop the price to a new affordable level of €20 for a 42"

I remember when I was a kid, there used to be TV repair shops.

I haven't seen a TV repair shop since the start of the boom, it made more sense to throw it away and buy a new one, cheaper, why not?

Those days are gone I'd say.

It'll probably be like Cuba here in a few years, people hoarding old stuff and trying to repair it for as long as possible.
And hoping their relatives in the States will send home a few bob at Xmas for the kids.

gollem_1975

sollar wrote: »

No there will be no apology from me, he hardly shouted about something so important did he?

When did he or any other economist make reference to this clause:

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act

Well me personally its the first time I have heard this idea in the public domain along with the idea that the bondholders could have been forced to take shares in the banks.

It all seems so simple ( perhaps too simple even ).

was the worry that if the gov didn't play ball with the bondholders that the money would not have been there to cover the deposits ?

if that was the case we would not be worrying about what might happen next year because we'd already be in the middle of the "social conflict" as morgan kelly puts it.

If Ireland can avoid the social conflict that kelly alludes to then, mad as it sounds, history may even look fondly back on the current government.

sollar

Sesshoumaru wrote: »

Are you serious? You sound like you're blaming Morgan Kelly for this mess! You should be asking why didn't FF make reference to this! or the opposition parties?

Morgan Kelly warning about the bank bailout

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act

This is a critical peice on info that i have heard nothing about until now. Maybe morgan didn't know about it earlier maybe he did an said little, maybe the papers didn't take it up but either way it was a way out of this mess of a bailout and has been absent from the main debate over the last while.

I'm not blaming morgan kelly for the mess i'm just frustrated about articles like this one on Nov 8th coming after the events - as usual in ireland.

Maybe these people are being ignored as the media drone on about the public service instead.

Can anyone find a reference to any economist mentioning this clause before september 2010???

gollem_1975

Deleted User wrote: »

Indeed,given that he's paid by the tax-payer and would be at the brunt of any 60% public and civil service salary cuts imposed by the IMF

sorry I don't get your point. please explain.

Deleted User wrote: »

Colour Tv's are going to be come a rarity in Ireland again,we won't even have the money to rent them like some rich people were able to do in the 70's...
Curry's won't be shy in throwing in the towel when theres no market for their products.They won't drop the price to a new affordable level of €20 for a 42"

you're no morgan kelly when it comes to predictions.

the relative costs of technology has come down substantially since the 70's

I wouldn't predict any shortage of TVs , computers etc. over the next 10 years ( i'm not saying they'll be top of the range but put it this way we won't all be upgrading every 2 years to the latest model )

shortage of electricity supply is another story altogether..

He's a lecturer isn't he? so if ps salaries fall so does his.

As for TV's,when the number of people buying them every 2 or 3 years because they want the lastest stops because the emphasis in their households has to change to keeping that last few hundred for the next mortgage payment,then the margins or lack of them in the likes of currys will mean 50 shops will become 5 and eventually a pull out.

cavedave

you're no morgan kelly when it comes to predictions.

No it appears not

18-11-2008, 16:36 #5
Black Briar
This isn't after hours I'm starting to worry myself now...
Not about the banks but about the pervasiveness of absolute twaddle I'm reading in two threads on this forum.

It's up there with the earthquake/volcano threads I've seen on the weather board.

cavedave

cavedave wrote: »

No it appears not

Did you read post 2?
And whats wrong with post 5 when read in conjunction with post 2?

And as for the post I thanked,most of that post is sound.

gollem_1975

ei.sdraob wrote: »

You are missing something, the ECB with its money printing machines computers can absorb losses if needed, the average "normal" retail banks can't. At the end of the day the ECB quite literally creates money out of thin air, normal banks need deposits in order to lend x times over on the other hand.

I don't agree with your analysis but admittedly I'm no expert.

isn't the opposite to the last sentence in your post the reason why we are in this mess in the first place

I still think its in the ECB's interest to pay them back this money. If we were to default then what would stop any other country from doing the same n'est pas ?

Ireland might appear too small to be more than a whipping boy for the ECB ( as Morgan kelly seems to think we will be treated as ) . on the otherhand one could say that for the survival of the European project as it currently stands the EU can't afford to treat us too harshly either ?

ei.sdraob

gollem_1975 wrote: »

Ireland might appear too small to be more than a whipping boy for the ECB ( as Morgan kelly seems to think we will be treated as ) . on the otherhand one could say that for the survival of the European project as it currently stands the EU can't afford to treat us too harshly either ?

Well thats the thing, at some point a cost/benefit analysis could be done and it might end up that it would be financially and of course politically (for the Germans) more sense to let Ireland default partially or fully than continue down our path. Merkel was warning the bondholders that she will burn them if they rock the boat to much, needless to say comments like that dont inspire confidence With the EU banks leaving the country that just leaves us holding the c**k.

Actually it starting too look like a default (on banking ****e) and restructuring (we still issues in welfare/ps) is the best possible option for Ireland and majority of its people. Ireland is one of the few countries in the world that never defaulted, theres no time like present

I still think that keeping Ireland and Greece afloat is ECBs version of quantative easing in order to devalue the currency. They might affoard to do that for us since we are relatively small, but if Spain, Italy and France don't get on track no amount of money printing will help keep this project together.

gollem_1975

Deleted User wrote: »

He's a lecturer isn't he? so if ps salaries fall so does his.

I still don't quite follow. I would be v.suprised if Morgan Kelly was of the opinion that public sector salaries should not be decreased. then again I have to admit i still don't see the relevance of this comment.

Deleted User wrote: »

As for TV's,when the number of people buying them every 2 or 3 years because they want the lastest stops because the emphasis in their households has to change to keeping that last few hundred for the next mortgage payment,then the margins or lack of them in the likes of currys will mean 50 shops will become 5 and eventually a pull out.

yes , i think peoples expenditure over the next few years is going to be more , how should we put it "modest" .

then again I looked at the free gloss magazine that comes with the irish times on a thursday and in the mens fashion section they had a classic styled watch for €6500 ( the same as the cost of the PGDE ).
Is this is a case of nero fiddling while rome burned or is it a reflection that there is still money in the country.

I think the trend of people ( with the exception of the early adopters ) upgrading tech in the same short timespan will depend on the costs of this tech. but also in terms of the the tech improving.. i mean theres a lot of the gear that is currently out there (and in peoples houses) at the minute exceeds user requirements.

i suspect that even if Currys/Dixons/PCWorld leave the market ,their internet offering pixmania will still sell into ireland for the forseeable future ( amazon are better anyway imo )

so to cut a short story long I think saying that colour TV's would become a rarity is somewhat OTT.

gollem_1975

ei.sdraob wrote: »

Well thats the thing, at some point a cost/benefit analysis could be done and it might end up that it would be financially and of course politically (for the Germans) more sense to let Ireland default partially or fully than continue down our path. Merkel was warning the bondholders that she will burn them if they rock the boat to much, needless to say comments like that dont inspire confidence With the EU banks leaving the country that just leaves us holding the c**k.

Actually it starting too look like a default (on banking ****e) and restructuring (we still issues in welfare/ps) is the best possible option for Ireland and majority of its people. Ireland is one of the few countries in the world that never defaulted, theres no time like present

I still think that keeping Ireland and Greece afloat is ECBs version of quantative easing in order to devalue the currency. They might affoard to do that for us since we are relatively small, but if Spain, Italy and France don't get on track no amount of money printing will help keep this project together.

In a funny way.. I actually feel better now from having read your post.. go figure

on a side note Boards must be getting hammered at the moment..i'm getting loads of 503's..time to go back to work anyway ;-)

cavedave

Black Briar

And whats wrong with post 5 when read in conjunction with post 2?

And as for the post I thanked,most of that post is sound.

The banking system was an existential risk to the Irish State.

You correctly pointed out that the ECB would rescue the Irish state from this. However it has done so at a loss of sovereignty

During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank

I was right to point out that the banking crisis could lead to the destruction of the independent Irish state. You were wrong to say that claiming this was ' up there with the earthquake/volcano threads I've seen on the weather board.'

jimmycrackcorm

I thought Kellys article was until I read this:

As a taxpayer, what does a bailout bill of €70 billion mean? It means that every cent of income tax that you pay for the next two to three years will go to repay Anglo’s losses, every cent for the following two years will go on AIB, and every cent for the next year and a half on the others. In other words, the Irish State is insolvent: its liabilities far exceed any realistic means of repaying them.

It's a bit of dramatization that sullies his points because it is the equivalent of me saying every cent I earn myself over the 4 years is going towards paying my Mortgage off; Instead of saying that I will be paying it off at a more affordable rate over a longer period of time.

gollem_1975

gollem_1975 wrote: »

I still don't quite follow. I would be v.suprised if Morgan Kelly was of the opinion that public sector salaries should not be decreased. then again I have to admit i still don't see the relevance of this comment.

Well..I was simply stating he'll be in the coal face of the pain.
I could have fleshed it out a bit further at the risk of more public sector poster ire by saying that..If he was of the view for the past couple of years that the country couldn't keep funding the €20 billion more than was coming in to run the country,then why didn't he hand back a modest 30% of his own salary-maybe he has [and I don't mean tax and levies ,I mean return what the country gives that it cannot afford]

then again I looked at the free gloss magazine that comes with the irish times on a thursday and in the mens fashion section they had a classic styled watch for €6500 ( the same as the cost of the PGDE ).
Is this is a case of nero fiddling while rome burned or is it a reflection that there is still money in the country.

Theres probably plenty of money in the country in savings-where that will go is anybodies guess.I don't know about you but any person that I know who saves a lot,doesn't spend a lot.
They're the type that bring it to the grave,not the type to depend upon for growth and certainly not in this climate.

Has there been much of a take up in the "national recovery bond" for instance?

so to cut a short story long I think saying that colour TV's would become a rarity is somewhat OTT.

I'm always prone to use a little hyperbole[just enough] to get a point across.
I used to use humour,even exasperation,but I just don't find all this funny anymore.
Though I must admit,I did chuckle at ei.sdraob's "no time like the present" comment

cavedave wrote:

However it has done so at a loss of sovereignty

To be honest,back in 2008,though it was ot for that thread,I'd have been of the view that something radical was needed to stem the madness of the increasing current budget defecit.

I was right to point out that the banking crisis could lead to the destruction of the independent Irish state. You were wrong to say that claiming this was ' up there with the earthquake/volcano threads I've seen on the weather board.'

Our independence in that sense,the financial sense left us a long time ago when we signed up to the Euro and the now infamous 3% rule.
With all due respect to you,talking about running a country in terms of independence when we've shown we can't run a tap,belongs in the same school of thought as those Éirigí boys in that thread over on politics protesting about how oppressive our Gardaí are.
It's fringe stuff in my opinion..

gollem_1975

cavedave wrote: »

The banking system was an existential risk to the Irish State.

You correctly pointed out that the ECB would rescue the Irish state from this. However it has done so at a loss of sovereignty

I was right to point out that the banking crisis could lead to the destruction of the independent Irish state. You were wrong to say that claiming this was ' up there with the earthquake/volcano threads I've seen on the weather board.'

Can you explain what this means in laymans terms. how does it impact the average boards.ie user ?

also are you saying that your prediction of the destruction of the Irish state has already been fulfilled or is that something that is still to happen ?

deadduck

gollem_1975 wrote: »

Well me personally its the first time I have heard this idea in the public domain along with the idea that the bondholders could have been forced to take shares in the banks.

correct me if i'm wrong here (and i could well be), but is this not the same as a debt/equity swap, which DmcW has been going on about for ages?

gollem_1975

deadduck wrote: »

correct me if i'm wrong here (and i could well be), but is this not the same as a debt/equity swap, which DmcW has been going on about for ages?

I don't know tbh..perhaps one of the more informed posters can confirm that.

from my slightly better informed than layman position - some of the other comments DMcW came out with in recent years such as leaving the euro turned me off his analysis (though perhaps that scenario is not as unrealistic as I thought i.e. if we default i suspect that means we're back to the punt)

however i think one things for certain is that there was never going to be an easy way out. would the debt/equity swap have made the current picture any rosier ? suppose we'll never know.

cavedave

gollem_1975
Can you explain what this means in laymans terms. how does it impact the average boards.ie user ?

also are you saying that your prediction of the destruction of the Irish state has already been fulfilled or is that something that is still to happen ?

We no longer get to decide how to run the country the ECB does. Morgan kelly said this in the article

During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank

the Irish economy blog has been saying it.

Black Briar is right when he says 'we've shown we can't run a tap' but its a pretty sad thing to admit. I dont think you have to be a raging Shinner to think that its a pity the Irish state as an independent financial entity no longer exists because of some politicians looking after their banker mates.

gollem_1975

cavedave wrote: »

We no longer get to decide how to run the country the ECB does. Morgan kelly said this in the article

the Irish economy blog has been saying it.

Black Briar is right when he says 'we've shown we can't run a tap' but its a pretty sad thing to admit. I dont think you have to be a raging Shinner to think that its a pity the Irish state as an independent financial entity no longer exists because of some politicians looking after their banker mates.

well i for one welcome our ECB overlords

but seriously folks Its not as if we have been blitzkrieged and occupied by the bundeswehr.

For me language such as "destruction of the irish state" is far too emotive.

what would be worrying to me if the "social conflict" which Kelly alludes to were to happen and I'm hoping it doesn't.

cavedave

cavedave wrote: »

We no longer get to decide how to run the country the ECB does. Morgan kelly said this in the article

who decides though if we leave the Euro and went it alone.
There wouldn't be much left to decide on.
We'd have fcek all decisions to make as we'd have the budget of ballymacistan to do it with.

Ultimately I think we are where we are... but do the voters have the balls to accept this,dust themselves off,insist on the necessary changes,learn the lesson and move on.I have my doubts,I always say this in the end....we're too selfish.
Thats the problem at the politics level,they want to be elected,so they must pander to the majority of the electorate that think that way.
Some of the minority of politicians that are on the extreme left side of things pander to voters who just have no grasp of all thats talked about in this forum and don't care a whole lot.

Looking at it in the short to medium term as a sovereignty loss is just introducing another tedious issue in my opinion clouding the get up off our backsides and rebuild the place approach that we do actually need.

@ Gollem_1975 I've just given you the thanks of doom there for that last post
Expect the german tanks to be rolling up o'connel st in 2 years time or so and cavedave to be quoting this thread...

gollem_1975

Deleted User wrote: »

@ Gollem_1975 I've just given you the thanks of doom there for that last post
Expect the german tanks to be rolling up o'connel st in 2 years time or so and cavedave to be quoting this thread...

einfach klasse!

better go dust off that old copy of Deutsch Heute

The_Honeybadger

deadduck wrote: »

correct me if i'm wrong here (and i could well be), but is this not the same as a debt/equity swap, which DmcW has been going on about for ages?

Yes and other leading economist including a nobel prize winner, Josef Stiglitz who has written some very critical articles on Irelands handling of the crisis including a lenghthy document explaining why NAMA is simply robbery of this nations taxpayers. Also the papers and RTE were carrying stories all summer about the extension of the guarantee which was due to end in September, so I don't see how anybody who follows the media can say this came as some sort of surprise. I think Ireland is going to be a classic case study for economics students around the world of how to not handle a crisis, expert advice from world leading economists was simply dismissed out of hand, if they even bothered to read it. Perhaps the ECB will be kind to us, who knows.