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Who Predicted This? Who Do We Blame?
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I am not arguing eith this, it has become common knowledge. In fact I would suggest that what I have said in the above quote is simply another way of saying the exact same thing - the statistically impotent gap between "partially and significantly" and "almost entirely" is not significant enough, in my opinion to merit a serious or long winded debate on this.
No, it was almost entirely fueled by this.It was partially, and significantly, fuelled by this, indeed. My problem is not with that statement.
True. The CB and the FR's responsibilities are not lessened by the hanging mouth of an economically retarded and undeniably mute media and an equally mute body of economic professionals. i am saying that in my opinion, both failed to wave the red flags in relation to banking. It is true that the FR in particular ought to have had the more serious responsibility to wave such flags, though I would consider that similar responsibility also lay with the media and the financial professions in Ireland themselves.This is the thing - whilst I agree the popular media was quite poor in highlighting the dangers, its not the job of the popular media to regulate the banks or inform Bertie Ahern of economic risks. Hence, if youre giving credibility to Bertie's self serving ramblings based on the fact the Irish Times didnt run with a headline of "BERTIE - LISTEN UP! WE'RE ****ED!" every day from 2003 to 2007 youre forgetting that Bertie, the DoF, the CB and the FR were not paid to read the Irish Times to discover threats to the economy...they were paid and empowered to go and identify and control systematic risks by themselves.
In relation to the banks? Probably not. Of course, that is another problem in itself.Berties view that he was never warned about the possibility of a serious hit to the banks is below contempt. He was ignoring warnings from 2000 onwards.
Yet many did. Everyone keeps saying how totally obvious it was that a banking crisis would follow on from a property crash (despite the fact that typically the two are not correlated and they probably weren't saying that four years ago), in my opinion it was not all that obvious at all.Pundits had difficulty even getting a hearing on there being valid fears of a property crash, let alone exploring the resulting impact. A blizzard of counter-attacks from banks, the government, social partners, property developers and construction related interests would besiege any pundit who pointed out weakness in the property bubble.
No, firstly I agree that such information is hard to mine into, even today. But if, as you pointed out, an international and only remotely interested economics publication could get at such information, one does have to plead the question what on earth the more home grown variety of economic professionals and media pundits were doing with their hands at this time.You also seem to be blaming independant pundits for not having a full oversight of the economy, particularly the private banking sector. As a private citizen, Id like to see you get a full and clear understanding of whats hiding in the Anglo-Irish books even today, let alone 6 years ago.0 -
No, firstly I agree that such information is hard to mine into, even today. But if, as you pointed out, an international and only remotely interested economics publication could get at such information, one does have to plead the question what on earth the more home grown variety of economic professionals and media pundits were doing with their hands at this time.
For goodness' sake, you keep nattering on about that article (which was in The Economist, not Time, BTW). That it's so amazing that an international magazine was saying what no economists in Ireland did! And that they predicted the banking collapse, so that proves it was possible to foresee it back in 2004! Here's the relevant quote you think is so telling:The banking system is heavily exposed: the big Irish banks, such as Bank of Ireland and Allied Irish, are in effect mortgage banks, observes Colm McCarthy of DKM Economic Consultants. A property crash would badly hit their balance sheets.
Does it not strike you that they are discussing the view of an Irish economist in Ireland?? Colm McCarthy! And do you not see that this quote does not constitute a prediction of bank collapse? It simply says that if a property crash were to occur, the banks would be bady hit. It says nothing about whether the banks were adequately capitalised to absorb the hit; if The Economist (or McCarthy) thought they weren't, they probably would have said so.
It's just a warning that the banks were playing a dangerous game, and yes plenty others in Ireland were saying that. Did you bother looking at the link of Alan Ahearne's writings that I supplied above thread? I also mentioned David McWilliams -- did you follow up on that (not hard to find his writings -- they're all at davidmcwilliams.com)? Start with his article "Banks Are Drowning Us in Debt" from 2005, where he talks about how their lending practices were threatening the stability of the system. Google the Central Bank's Financial Stability Reports and you will see that they were expressing concerns about the banks in 2000 and after.
Even going back to 1997, the Central Bank governor told the Oireachtas Committee on Finance and Public Service that
the Bank had warned financial institutions repeatedly of the dangers inherent in high rates of credit growth and any relaxation of lending standards.
In the following years, as Finance Minister Charlie McCreevy stoked the property boom with income and capital tax cuts coupled with a massive expansion of property tax incentives, the annual reports of the Central Bank chronicled the letters that were sent by the governor to the financial institutions, pleading for prudence.
The bankers must have been laughing up their sleeves!
In April 1999, the governor had issued a letter stating that an analysis of practices had shown that some lenders had no evidence as to how borrowers came by the balance of their money. The governor criticised what he called, the particularly disturbing practice of allowing large amounts of the borrowers after tax income to go towards paying off a mortgage.
The 1999 annual report notes: "Institutions were...advised that it remains vitally important for them to take a medium term perspective and to reckon with the potential consequences of rising interest rates and a return to lower rates of growth in the economy. All institutions gave assurances that there would be no slackening in prudential lending standards."
http://www.finfacts.ie/irishfinancenews/article_1021074.shtml
If you're sincerely interested in this subject, do some research yourself, don't whinge at us to do all the work. "Is that too much to ask?", as you like to say?0 -
Not everybody jumpedThis is exactly the sort of bizarre opinion that any reasonably intelligent analysis of the situaion is up against. If "we the people all knew" what was about to happen, why were "we the people" so enthusiastic about private and commerical debt and inflated house prices, a shark pool into which we seemed to leap so blindly and with such careless abandon? Or is it your argument that the people were financially kidnapped and shortly thereafter pushed in to monetary nonchalence against their typically austere and sober will?0 -
Exactly, so if it were possible for an Irish economist in Ireland to be aware of such bubbling danger, where was the rest of the Irish attention?LostinKildare wrote: »Does it not strike you that they are discussing the view of an Irish economist in Ireland?? Colm McCarthy!
Sticking their fingers in their ears, like most other people, I would suggest.
Indeed, while it does allude to the risk, I have already pointed out exactly what you said in the above quote (read the thread), and I asked for better examples.And do you not see that this quote does not constitute a prediction of bank collapse?
So far none have been forthcoming. .
Firstly there was no warning about bank meltdown in any way that is relevant to the current crisis, we weren't even in the Euro at the time and had significantly greater capital control. The current debt crisis does not date to 1997, it's another issue entirely.Even going back to 1997, the Central Bank governor told the Oireachtas Committee on Finance and Public Service that0 -
I blame the developers, they took out massive loans, got brilliant tax breaks from their TD mates, made lots of money then as a big thank you to Ireland they pumped all their profits into other economies.0
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Can I reiterate that the property crash was well signalled?
I'm talking about the banking crisis that resulted.
Names? Irish names? Is Bertie right?
It's a bit like bread and butter, if there is going to be a property crash, all but the completely uniniated will know banks are going to crash.
Ahern's quote in '06 : 'the boom times will get boomier'.
And as someone correctly said, those giving warnings were labelled begrudgers and doomsdayers etc0 -
Exactly, so if it were possible for an Irish economist in Ireland to be aware of such bubbling danger, where was the rest of the Irish attention? Sticking their fingers in their ears, like most other people, I would suggest.
Did you read the McWilliams article I suggested? Did you read the CB Financial Stability reports? Did you read Ahearne? Reportedly, Ahearne was the pessimistic economist whose warnings re the banks’ lending inspired Bertie to lash out at cribbers and moaners who ought to commit suicide.
Did you read any of those links? Didja? Didja? Didja? Have you got your fingers in your own ears?
Indeed, while it does allude to the risk, I have already pointed out exactly what you said in the above quote (read the thread), and I asked for better examples.
Have you read the thread? When I suggested upthread that predictions of impending bank collapse (as opposed to more general warnings about the “bubbling danger,” as you term it) don't exist pre-2007 because such a significant bank crisis wasn't likely absent developments that occurred after 2006, you countered by citing the 2004 Economist article as evidence that such early predictions were possible:
the Time [sic] magazine article that Sand linked to shows that it was possible for those outside of the realm of the Government to make themselves aware of the impending banking crisis pre 2007, but apparently nobody did to any real or significant degree.
You can't have it both ways.
If the McCarthy/Economist warning meets the standard of the level of warning you are looking for --- not a prediction of impending bank meltdown, but a warning of “bubbling danger” --- then you have been given examples that meet that standard and you are ignoring them. Is that you, Bertie??
Firstly there was no warning about bank meltdown in any way that is relevant to the current crisis, we weren't even in the Euro at the time and had significantly greater capital control. The current debt crisis does not date to 1997, it's another issue entirely.
No, of course there was no warning about bank meltdown that early --- that is in line with what I’ve argued all along. But certainly it is relevant that the CB governor as early as 1997 was warning the Dail committee that the Irish banks were already flirting with dodgy lending, and that when we joined the Euro they would have much greater access to foreign credit which the CB would have no authority to restrict. (You didn't read the link, did you?)
When we joined the Euro, the Irish govt, having been warned by its own CB that the banks were greedy children, closed its eyes to the danger of letting them loose in a candy store with no adult supervision. If you read the link (didja?) you see that Spain, for example, put in place restrictions to prevent their banks from going wild when they joined the Euro; our own govt chose not to.0 -
Yeah, you seem to be under the impression that a highly indebted society must inevitably face a debt crisis. McWilliams makes no reference to an impending crisis, it was not unusual for public discourse on Irish indebtedness any more than discourse on the property bubble, the dogs on the street knew about both. I'm not sure if you are missing the point or you had really meant to link to a McWilliams article on a banking crisis, perhaps.LostinKildare wrote: »Did you read the McWilliams article I suggested?
Already commented on these.Did you read the CB Financial Stability reports?
Okay, but I haven't read anything from him about predicting a banking crisis. He was more concerned with European interest rates crucifying Irish debt rather than about capital concerns based upon what I've read, perhaps you might correct me with a link to his prediction of what has actually happened.Did you read Ahearne? Reportedly, Ahearne was the pessimistic economist whose warnings re the banks’ lending inspired Bertie to lash out at cribbers and moaners who ought to commit suicide.
No I didn't say it proves that early predicitons were possible. Read my posts. I expressed doubt about that article, but I admit it does lend credence to the opinion that concern would have been deserved and a prediciton of a possible crisis would not have been outlandish.Have you read the thread? When I suggested upthread that predictions of impending bank collapse (as opposed to more general warnings about the “bubbling danger,” as you term it) don't exist pre-2007 because such a significant bank crisis wasn't likely absent developments that occurred after 2006, you countered by citing the 2004 Economist article as evidence that such early predictions were possible:
But that's what this thread is about. If you're trying to make it about something else, or go off on a tangent about how grateful we ought to be to the CB for doing its job (allegedly), then do so with someone else. I'm talking about predicitons of bank meltdown. Simple as.No, of course there was no warning about bank meltdown that early --- that is in line with what I’ve argued all along.
Quite another issue but I would love to know what you're trying to get at with that spade in your hand... Do you know how that turned out for Spain?Spain, for example, put in place restrictions to prevent their banks from going wild when they joined the Euro; our own govt chose not to.0 -
Yeah, you seem to be under the impression that a highly indebted society must inevitably face a debt crisis.
Since I've said over and over that the present crisis probably would not have occurred save for developments that occurred after 2006 -- and certainly our society was heavily indebted before then --- I don't know how you arrive at that conclusion.McWilliams makes no reference to an impending crisis, it was not unusual for public discourse on Irish indebtedness any more than discourse on the property bubble, the dogs on the street knew about both. I'm not sure if you are missing the point or you had really meant to link to a McWilliams article on a banking crisis, perhaps.
Already commented on these.
Okay, but I haven't read anything from him about predicting a banking crisis. He was more concerned with European interest rates crucifying Irish debt rather than about capital concerns based upon what I've read, perhaps you might correct me with a link to his prediction of what has actually happened.
No, none of them predict what has happened!! Are you being willifully obtuse? I have repeated several times that I don't believe such a dire prediction would have arisen pre-2007.
What the referenced economists do do is warn of what you call "bubbling danger," as McCarthy does in The Economist. You asked for examples like McCarthy -- like McCarthy, these do not predict the crisis!No I didn't say it proves that early predictions were possible. Read my posts. I expressed doubt about that article, but I admit it does lend credence to the opinion that concern would have been deserved and a prediciton of a possible crisis would not have been outlandish.
Actually, you said that it was a "reference to a banking crisis" (posts #78 and #110). It is not.But that's what this thread is about. If you're trying to make it about something else . . .
This from the guy who started a thread about how Bertie Ahern was "right" without any regard to what he had actually said, and repeated that theme for several pages, then when it was shown that Bertie was indeed wrong -- by 2007 there were very stark warnings --changed tack 100 posts into the thread:
andEven if Bertie is talking about that time period, I'm actually more interested in the time period when the banking collapse had not started to emerge in the public conscience, which I would say was about 2007.Forget Fianna fail and Bertie, all i'm asking for is names and relevant articles. Is that so much to ask?
This is a waste of time. I'm out.0 -
This is exactly what I'm saying, and the reason why I started the thread in the first place. Why, if as you suggest you have been saying that all along, why exactly are you even debating the point with me in that case? Bizarre.LostinKildare wrote: »No, none of them predict what has happened!!
I asked for better examples. I didn't altogether dismiss Mccarthy's contribution to the article because it does touch on the problem. Read the thread, please.What the referenced economists do do is warn of what you call "bubbling danger," as McCarthy does in The Economist. You asked for examples like McCarthy -- like McCarthy, these do not predict the crisis!
Bu 2007 the problem was set in stone, the outcome had already started to emerge in the public conscience, it was game over. Any predictions of a crisis were well overdue by 2007, a pundit would merely be passing on what was plain to see in black and white, not actually predicting anything useful. Just as is the case now. It is plain to see how Irish banks will emerge from the crisis, or merge, and in what order they can do so. It doesn't amount to anything prophetic nor deeply and wisely considered, just as it was not prophetic to hark on about such things in 2007.This from the guy who started a thread about how Bertie Ahern was "right" without any regard to what he had actually said, and repeated that theme for several pages, then when it was shown that Bertie was indeed wrong -- by 2007 there were very stark warnings --changed tack 100 posts into the thread:
I am asking, I am still asking, for predictions of a meltdown or a banking crisis from a time before it was glaringly obvious to the most economically illiterate in society. So far none have been forthcoming. All I am asking for is a name and a link.
Debate as you will as regards my request, you haven't provided that, nor has anybody else. It would not be unreasonable to assert that if Bertie Ahern would say that he was not warned in good time, then he would be quite right.
Part of that was, of course, his own fault, but he would be right to suggest so nevertheless.0 -
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I am asking, I am still asking, for predictions of a meltdown or a banking crisis from a time before it was glaringly obvious to the most economically illiterate in society. So far none have been forthcoming. All I am asking for is a name and a link.
I've already provided a link to the central bank's 2004 report which warns of the consequences of continued credit expansion leading to a possible banking crisis. What more do you want?0 -
did you read my response?johnnyskeleton wrote: »I've already provided a link to the central bank's 2004 report which warns of the consequences of continued credit expansion leading to a possible banking crisis. What more do you want?0 -
Later10 - you honestly think that there could have been a huge property crash in this country with no consequences for those banks who lent tens of billions to developers to build these properties?
Or rather, do you honestly think that those in government should not have known this?0 -
Join Date:Posts: 13639
did you read my response?
Yes. As replied to here:
http://www.boards.ie/vbulletin/showpost.php?p=69998442&postcount=103
The part you quoted refers to what would have happened if credit was restrained in 2004, which is what the CB advocated. Instead, it went through the roof, thus fulfilling the CB's prediction that if credit grew at the unsustainable rate it was growing at, there would be a banking crisis.
But of course, you ignore all of this and selectively dismiss the report. Honestly, you are never going to accept that FF were warned by anyone, no matter what anyone says.0 -
Hmm...so I'm wasting my time discussing this with Later10.johnnyskeleton wrote: »But of course, you ignore all of this and selectively dismiss the report. Honestly, you are never going to accept that FF were warned by anyone, no matter what anyone says.0 -
Lets say it's the glory days again and everyone is spending spending spending and the goverment steps in and fixes the whole mess, the people would be in uproar and TDs would lose their jobs. We were given exactly what we wanted and now we are trying to blame everyone but ourselves!0
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There's an element of truth there, but if the government appointed a competent regulator, the banks couldn't have lent so much in the first place. And if the government hadn't guaranteed the debts of all the bankrupt banks, then we'd all be €150 billion euros or whatever better off. So a large part of the public certainly played a role, but it took Fianna Failure to properly sink the country.Fighting Irish wrote: »Lets say it's the glory days again and everyone is spending spending spending and the goverment steps in and fixes the whole mess, the people would be in uproar and TDs would lose their jobs. We were given exactly what we wanted and now we are trying to blame everyone but ourselves!0 -
Fighting Irish wrote: »Lets say it's the glory days again and everyone is spending spending spending and the goverment steps in and fixes the whole mess, the people would be in uproar and TDs would lose their jobs. We were given exactly what we wanted and now we are trying to blame everyone but ourselves!
Didn't vote FF and wanted better, sustainable policies, so not everyone fits in with your convenient little summary there.
Some people fit your profile, some don't; I certainly didn't get the Government I wanted or derserved.0 -
Liam Byrne wrote: »Didn't vote FF and wanted better, sustainable policies, so not everyone fits in with your convenient little summary there.
Some people fit your profile, some don't; I certainly didn't get the Government I wanted or derserved.
Well Liam, tell us who you did vote for and what you want as a government?0 -
For Bertie Ahern to say 'nobody warned me' is just another manifestation of his incompetence and brass neck - and the utter contempt with which he holds Irish voters. But to be honest, Bertie is simply the logical outcome for a party and political system that rewards loyalty over competence, and puts the good of the party over the good of the country.
I agree with many of the other posters in that you cannot disaggregate real estate booms and crashes from the banking sector. Most developers and home buyers are not plunking down cash. However, in places where politicians learn from past policy mistakes, the government usually implements regulations to limit future problems. Hong Kong is a prime example of this. Ireland is not.
That said, there is one key element here that I think has been under-discussed, and something that Ahern should have been mindful of given his position as Minister for Finance at the time: the risks of asset inflation and a banking crisis from the introduction of the euro.
Ahern was the Minister of Finance from 1991-1994 when negotiations for entry into the euro were ongoing and Ireland had to work out how to meet the convergence criteria. One of the main issues euro naysayers warned about was the prospect of hot money flowing into peripheral EU economies - the exact economies that are in trouble today due to massive inflows of cheap capital, loose credit, and ridiculously low interest rates, all of which fueled the property bubble and collapse. Since Ireland would no longer be able to control its monetary policy under the euro, the challenge from Day 1 was for its finance ministers to use fiscal policy and financial regulation in order to cool down an overheating economy. In any country, giving a political party control over these policy mechanisms (as opposed to an independent central bank control of interest rates, for example) would be dangerous - nobody wants to be the one to spoil the party. In Ireland, given the political culture and the fiscal ignorance of its finance ministers under Fianna Fail-led governments, it was fatal.0 -
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southsiderosie wrote: »'nobody warned me'
Accountability went out the window totally from the mid 90's to 2007. I remember several occasions when a minister should have resigned, but didn't. One specific one was where it was cheaper to go to Mars than it was to build the Luas. Martin Cullen said on Prime Time that the estimate for the Luas was written on the back of an envelope. And there was no demand for his job.
Accountability, answerability has only come back into fashion when it became apparent that there was a cost to nod nod, wink wink.
When people become very succcessful, they go off and they become citizens of somewhere else, like Portugal or Holland. Those who are are patriots have a nod nod wink wink relationship with guns and violence. And the rest of us have a post-colonial expectation that we should expect to be taken for a ride. Coz if we suffer and take this, there is a never never place called Heaven that we will go to only when we're dead.0 -
Where did the CB ever predict a banking crisis? Clearly we are not reading the same report. Not only does it say that credit booms in many countries have passed without causing significant difficulties for their banking systems, it actually talks down the glaring risk in that very report. The concern is about indebtedness primarily, if you don't understand the difference between indebtedness and bank insolvency then I'm afraid it isn't my job to instruct you. High levels of indebtedness can be fine, even in a hazardous market, so long as the bank has the ability to withstand the downfall by way of a capital cushion. Anyway here I go doing what I have just said I wouldn't.... really, poster, find a better example than the Central Bank to congratulate.johnnyskeleton wrote: »Yes. As replied to here:
e happened if credit was restrained in 2004, which is what the CB advocated. Instead, it went through the roof, thus fulfilling the CB's prediction that if credit grew at the unsustainable rate it was growing at, there would be a banking crisis.0 -
RichardAnd wrote: »Well Liam, tell us who you did vote for and what you want as a government?
Half of what I want was already stated - sustainable policies with less waste (problems aren't magically solved by throwing cash at them) and add in accountability and ethics.
As for who I voted for - FG, Labour & Independent, with a regrettable nod towards Greens last time out, but thankfully in hindsight he wasn't elected.
Not sure what relevance my voting preferences have, though (although there might be posts of mine here on boards from a few years back warning that 100% mortgages and a few other bank practices were recipes for disaster, so maybe it is relevant.0 -
After 10 pages, I think (if anyone has been so bored as to have actually read the whole thing as I myself have just done, unfortunately) the point has become clear.
While many people have predicted a property bust, and there were genuine concerns about private and commericial debt, there were, actually, no publicly articulated predictions of the full scale debt meltdown and the banking crisis as they have emerged.
So now I feel ready to expand on my original point.
Firstly, there are various entities and individuals to blame for the situation whereby this was not predicted.
Not least among them are the Government of the day and the former Taoiseach Bertie Ahern. Fianna Fáil positively emasculated the Financial Regulator, appointed chick-lit novelists to boards that were supposed to play a part in regulation, and made the Financial Regulator himself little more than a door to door salesman selling the Irish banks to the world.
It was an extreme, and highly dangerous, case of conflict of interest. It reminds me of the situation in Anglo Irish Bank up until recently whereby the guy responsible for risk management (Willie McAteer) was also the bank's Director of Finance.
In other words, there was a culture within the banking and regulatory industry whereby nobody seemed to see the harm in an executive acting both as coach and as referee, as poacher and gamekeeper.
But one would be foolish to stop there.
The fact remains that nobody at all in the media nor in economics seemed to point the finger decisively towards any real sort of crisis. David McWilliams saw a property bubble, but he didn't foresee a banking crisis. Neither did George Lee, neither did Alan Ahearne, neither did Morgan Kelly, neither did David Lucey, neither did Patrick Honohan. The list goes on. By the time any of these guys knew what was going on around them, it was far too late, and the repercussions were already manifest.
The excuse is usually given that if the Financial Regulator wasn't reporting the irregularities (or indeed if he was turning a blind eye), and the banks were not disclosing, then how could anyone have known? In some ways, that excuse is quite a valid explanation.
But here is the issue - concern did exist. We have seen clear examples of 'concern' in this very thread. Economists and pundits and media analysts, and even those in the central Bank did scratch their heads, but they also very much bit their lips. They expressed concern but never really followed it through. Concern, whenever it was even remotely expressed, was usually accompanied by an apologist retraction (e.g. Central Bank) or an immediate follow up with a nullifying opinion contradicting any serious risk: the line was that while there were definite risks and dangers, the banks were adequately cushioned to sustain the levels of indebtedness. Nobody seemed to contradict that, or question it.
So, while we have been let down by the regulatory mechanisms designed to protect us, we have also been let down by the guys that many of you see on your TV screens and read with your coffee, who appear to claim to know exactly what happened, and how it happened, and usually what is about to happen. By and large, people take their word for it.
Some people on here seem to have taken the opinion that I started the thread with the aim of defending Fianna fáil; I didn't, in fact I haven't defended that party at all in this thread, nor have I any interest in doing so in terms of regulatory standards.
Rather, I started the thread to point out a very simple truth. Pundits did not see this crisis coming. 'So what?', you could justifiably say, 'what is your problem with economic pundits?'. Well, I don't have a problem with them... apart from this little gripe: because their audience is the general public who understand (and care) little for economics, and because they have the admirable ability to simplify in words the most seemingly complex of explanations, pundits can hold huge sway in determining the public response to an economic event. Their influence in relation to the public mood, and indeed the international business opinion, can be enormous (Morgan Kelly's famous 'Our Lady of the Eurozone' article made international headlines and seemed to enrage and stupify the Irish Times readership all at once).
Therefore (and worry not, I am finally getting to my point), is it about time that we started to seriously take a second look at the type of punditry and media analysis that we, as a people, generally tend to accept as gospel.
Is it about time that we started looking to bare facts and figures ourselves, as opposed to listening to what may often be economic hyperbole, rather emaciated of statistical or case evidence, from people who have failed and failed again to predict the sovereign and banking crises that have effected the country, and the people, so very deeply?
We shouldn't stop blaming the Regulator or the Central Bank, or the Government for their failure to see any of this coming. But perhaps they weren't the only ones wearing blinkers either.0 -
@Later10Therefore (and worry not, I am finally getting to my point), is it about time that we started to seriously take a second look at the type of punditry and media analysis that we, as a people, generally tend to accept as gospel.
Is it about time that we started looking to bare facts and figures ourselves, as opposed to listening to what may often be economic hyperbole, rather emaciated of statistical or case evidence, from people who have failed and failed again to predict the sovereign and banking crises that have effected the country, and the people, so very deeply?
Punditry throughout the boom was supplied almost entirely by tame economists working in the banks or in the property industry. They supplied analysis to the papers and RTE that pleased their employers. They were biased, paid to overhype the bubble and ignore or understate risks.
So far so good - but you cite Morgan Kellys "infamous" article as an example of punditry. Morgan Kelly is an independant. Hes not employed by any bank. All thats been demonstrated is that we need to ignore the analysis provided by biased contributors who are paid by the banks and the various industries and vested interests to provide press releases that support policy.
It doesnt say anything for Morgan Kellys analysis. Morgan Kelly has influence on the public debate because hes recognised as being an independant who isnt afraid to tell things as they are, and is free to do so because hes not paid by the banks or the government to fool them. When Cowen and Lenihan and their various apologists were bleating about how we had turned the corner, everything was on the up Morgan Kelly gained credibility because he correctly warned of the huge and still unresolved risks and losses in the Irish economy. Confidence and optimism is not a strategy.
As for looking at the bare facts and figures ourselves to keep track of the economic and banking situation to form a view of the risks to the economy over the short to medium term, itd be nice but:
- We pay taxes so that the FR, DoF and CB do that for us. If were supposed to do it, fine, but lets disband the FR, DoF and CB then. Average people on the street have their own jobs to do, their own families to raise and their own lives to lead. Its ludicrous to expect them to have free time to perform informed economic analysis.
- Average people on the street do not have access to the facts or figures. Try get access to the AIB books.
- Average people on the street do not have the expertise or experience required to analyse the facts and figures.
To be honest, it seems youve got a ten page thread running due to your already established problem with Morgan Kelly. Apparently the logic is:
Some biased pundits were wrong*. Morgan Kelly is a pundit. Ergo, Morgan Kelly is wrong.
* For this to work of course, you have to doggedly ignore all the examples of people raising and citing the risks to the Irish economy, despite the blizzard of bank/government pundits.0 -
Whats the point in blaming anyone at this stage?
We can blame one another for the next 10,20,50 years and get now where, We need to learn from our mistakes and move on simple. Standing still blaming this one, that one and the other one wont allow that to happen...0 -
Whats the point in blaming anyone at this stage?
We can blame one another for the next 10,20,50 years and get now where, We need to learn from our mistakes and move on simple. Standing still blaming this one, that one and the other one wont allow that to happen...
What is prolonging the "blame game" is that no one is accepting any fault or responsibility in any serious manner. Bertie is a prime example of this: his biggest regret apparently is that no one warned him. So its not really his fault.
If we dont establish what went wrong, then we cant learn from our mistakes. The very first step in problem solving is to establish what the problem was, what happened - who or what is to blame.
The very worst result is that we move onto "learning from our mistakes" before we establish clearly what those mistakes were. If that occurs we simply leave the true issues unaddressed and simply make a few minor, pointless or ineffective changes whose prime characteristic is that they dont offend anyone.
For example, its quite clear that the DoF and the civil service in general failed utterly throughout the bubble and the crisis. Blame needs to be assigned there. Only once that is done can relevant solutions be presented.0 -
This has actually reminded me of something I forgot to say in that unfortunately lengthy post.Punditry throughout the boom was supplied almost entirely by tame economists working in the banks or in the property industry. They supplied analysis to the papers and RTE that pleased their employers. They were biased to overhype the bubble and ignore or understate risks.
With some exceptions, including the likes of Rossa White, punditry throughout the boom was not supplied by bankers or analysts within the system, as you suggest. In the mainstream media, it was largely supplied by academic economists like Alan Ahearne or Morgan Kelly, or the ESRI economists (many of whom are academic, or otherwise public servants), or media pundits like journalist turned standup David McWilliams.
There is a problem with this.
It was Seán FitzPatrick (of all people) talking to a journalist from the Sunday Business Post who said that the best place to go if you want hard information, is the Financial Times; the best for analysis is The Economist, but the best source of real information is the nineteenth hole on the golf course. Here is the problem with academic and media pundits.
Academics are, in their highly praiseworthy and creditable endeavours, far removed from the banking and investment industries and have little real interaction with capital and markets, and tend to be unfamiliar with how decisions are reached and how policies are arrived at outside of textbook or journal musings. They are not part of the Cap Ferrat set, they do not generally associate with banking executives nor finance directors, and they are not subject to nor privy to the day to day world of business, investments and international banking.
This makes them independent, but at the same time it detracts from their repertoire of erudition when it comes to advising the public on these systems and entities.
This is why in institutions like the ECB there is a big debate as to whether one ought to favour academic economists or those with real experience of banking and investment. Hence the biggest stumbling block to Prof. Axel Weber's candidacy for the Presidency. It is widely industrial bankers and economists who come from within the system and from the big firms who are viewed as being the key to future leadership.
I'm not dismissing academic economists or any economist or pundit simply based on where they work. However, Trinity College and UCD may be close to the irish banks, accounting firms and fund managers in geographic terms, but like many academic institutions, they are a million miles away in real terms. Banks are not run like they are in textbooks, nor ought they be. Markets do not behave in logical or reasonable trends. Academics, while independent, ought to have their pronouncements taken only in light of (but not necessarily in line with) what the banking industry and financial experts within that industry are themselves saying.0 -
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This has actually reminded me of something I forgot to say in that unfortunately lengthy post.
With some exceptions, including the likes of Rossa White, punditry throughout the boom was not supplied by bankers or analysts within the system, as you suggest. In the mainstream media, it was largely supplied by academic economists like Alan Ahearne or Morgan Kelly, or the ESRI economists (many of whom are academic, or otherwise public servants), or media pundits like journalist turned standup David McWilliams.
There is a problem with this.
It was Seán FitzPatrick (of all people) talking to a journalist from the Sunday Business Post who said that the best place to go if you want hard information, is the Financial Times; the best for analysis is The Economist, but the best source of real information is the nineteenth hole on the golf course. Here is the problem with academic and media pundits.
Academics are, in their highly praiseworthy and creditable endeavours, far removed from the banking and investment industries and have little real interaction with capital and markets, and tend to be unfamiliar with how decisions are reached and how policies are arrived at outside of textbook or journal musings. They are not part of the Cap Ferrat set, they do not generally associate with banking executives nor finance directors, and they are not subject to nor privy to the day to day world of business, investments and international banking.
This makes them independent, but at the same time it detracts from their repertoire of erudition when it comes to advising the public on these systems and entities.
This is why in institutions like the ECB there is a big debate as to whether one ought to favour academic economists or those with real experience of banking and investment. Hence the biggest stumbling block to Prof. Axel Weber's candidacy for the Presidency. It is widely industrial bankers and economists who come from within the system and from the big firms who are viewed as being the key to future leadership.
I'm not dismissing academic economists or any economist or pundit simply based on where they work. However, Trinity College and UCD may be close to the irish banks, accounting firms and fund managers in geographic terms, but like many academic institutions, they are a million miles away in real terms. Banks are not run like they are in textbooks, nor ought they be. Markets do not behave in logical or reasonable trends. Academics, while independent, ought to have their pronouncements taken only in light of (but not necessarily in line with) what the banking industry and financial experts within that industry are themselves saying.
Fair point.
On the other hand commentators/analysts/pundits who are industry insiders can be captured in similar ways to a regulator.
I would suspect that an insider is very unlikely to make Morgan Kelly style pronouncements of impending crisis if it might upset other industry insiders. He might find it hard to find anyone to play golf with afterwards.0
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