McWilliams's idea for the banks

Voltex

I was listening to David McWilliams this morning and his reaction to yesterdays events. He seems to be hitting a few good points at the moment and seems to be one of the only economists who is trying to come up with soemideas on how to effectivly deal with our banks in the absence of a commitment from frankfurt.
His plan in a nutshell

1. Immedieatly put all the Irish banks in examinership.
2. Look for a buyer
3. Ask the country with the World highest trade surplus and capital account surplus; China, if they would be interested in buying an irish banking system for €1 in exchange for re-capitilisation of the banks and for the return of the monies already supplied by the state.

Appraently the logic for such a plan lies in the fact that the Chiebse have been trying to gain access to the european banking sector for yeras without success and that the idea in Europe that the Chinese will have such a direct impact on the european banking system viz a viz owning a eurozone banking system...that the utter shock of it would prompt the ECB and the EU Commision into action on Irelands behalf.

Is McWilliams spoofin out his hole or is there some creditablity to this appraoch?

douglashyde

Sounds interesting.

Brings me back to when a Japanesse company were willing to build the Luas line for free in return for being able to collect the ticket revenue.

My main worry about this would be what implications would a move like this have on Irish Citizens; or would the whole thing be a bluff to prompt the ECB

thetonynator

McWilliams regularly comes out with great ideas, however he can generally say what he wants because no one looks at it too closely and he knows it won't be done.

Wildebrian

Is it my imagination or is Mr Mc Williams becoming the Michael O Leary of Irish Economics.Wouldn't it be great if everyone could act unilaterally !

later12

Wildebrian wrote: »

Is it my imagination or is Mr Mc Williams becoming the Michael O Leary of Irish Economics.Wouldn't it be great if everyone could act unilaterally !

Michael O'Leary has proven himself in the commercial world; McWilliams has excelled neither in commerce nor in academia, he is a media man whose career is dependent on the whims of that industry. He does his best to say what sounds popular. I would be wary of taking seriously the economic advice emanating from such an individual.

Step one assumes that the court would rule that the banks can be sold as a going concern and that they have a tangible future in and of themselves. For starters, the good thing about being in McWilliam's position on the sideline is that nobody will ask him what happens if that doesn't occur.

Degsy

I hate the smug ginger bastard but i will say this..three years ago he predicted this mess in its entirety.even going so far as to travel to bulgaria in an attempt to stop irish people "investing" there.

He also predicted the housing crash one year before it happened and correctly told people that buying apartments instead of houses would result in unprecedented negative equity.

Nobody listened to him at the time but he spak the truth.

hmmm

The man who gave us the guarantee idea* now has another great idea. I'll pass.

* and yes I know he had a series of "but I didn't mean them to implement it in this way" after it all went pear shaped.

barfizz

Voltex wrote: »

I was listening to David McWilliams this morning and his reaction to yesterdays events. He seems to be hitting a few good points at the moment and seems to be one of the only economists who is trying to come up with soemideas on how to effectivly deal with our banks in the absence of a commitment from frankfurt.
His plan in a nutshell

1. Immedieatly put all the Irish banks in examinership.
2. Look for a buyer
3. Ask the country with the World highest trade surplus and capital account surplus; China, if they would be interested in buying an irish banking system for €1 in exchange for re-capitilisation of the banks and for the return of the monies already supplied by the state.

Appraently the logic for such a plan lies in the fact that the Chiebse have been trying to gain access to the european banking sector for yeras without success and that the idea in Europe that the Chinese will have such a direct impact on the european banking system viz a viz owning a eurozone banking system...that the utter shock of it would prompt the ECB and the EU Commision into action on Irelands behalf.

Is McWilliams spoofin out his hole or is there some creditablity to this appraoch?

Either you or McWilliams have forgotten that it is April 1st

bradlente

Sounds like a great idea,What would it be like in practice though?

As later10 pointed out above u would have to assume the courts would rule that the banks could be sold.

If the government tried this and failed I can imagine the ECB would be much harder on us in future negotiations.

In saying that though,We're getting fukall concession from them anyway,and with default looking more and more likely down the road,It'd be great to see the government actually try and put the frights into Europe instead of just lying down.They'll have to make the cuts at the end of the day and they're the ones that will get blamed in the future by society for doing so.

As for McWilliams,He used to annoy me.Then he predicted a number of events and developments to happen that did,So now I listen when I hear him talk.Although I agree with above posters that its easy to say such things and sit on the sidelines(as we all are:pac:).

He has a big profile here which is what makes me rather cynical as regards to his opinions,because,If Mcwilliams really has conviction in his ideas then why didn't he run in the election?

Sand

McWilliams is spoofing if your post is an accurate summary of his views. The Irish banks are poisoned brand names, so not that attractive for a buyer that might attempt to use them to get a toehold in a market. Also, one has to ask why the Chinese would risk angering the EU for vague benefits? China may have the long term interest to see a strong EU as a source of orders for its exporters, but that doesnt mean it wants to get involved in buying a lot of small, insolvent, peripheral property banks with an awful reputation.

Ireland is going to need to find the spheres to stand up for itself, rather than hoping some rich uncle is going to arrive in the nick of time to save us.

Voltex

bradlente wrote: »

Sounds like a great idea,What would it be like in practice though?

As later10 pointed out above u would have to assume the courts would rule that the banks could be sold.

If the government tried this and failed I can imagine the ECB would be much harder on us in future negotiations.

In saying that though,We're getting fukall concession from them anyway,and with default looking more and more likely down the road,It'd be great to see the government actually try and put the frights into Europe instead of just lying down.They'll have to make the cuts at the end of the day and they're the ones that will get blamed in the future by society for doing so.

As for McWilliams,He used to annoy me.Then he predicted a number of events and developments to happen that did,So now I listen when I hear him talk.Although I agree with above posters that its easy to say such things and sit on the sidelines(as we all are:pac:).

He has a big profile here which is what makes me rather cynical as regards to his opinions,because,If Mcwilliams really has conviction in his ideas then why didn't he run in the election?

TBH...I really couldnt give a rats arse who owns the banks..so long as it aint me!!
McWilliams is a pop star economist right now and his job relies on the likes of me listening to him...but what i will say, is that the man is making an effort to come up with a few ideas...so ok they may be a bit wild and right out there at the fringes...but they can all be classed as optional!!

brianwalshcork

Can anyone explain what would / could happen if the a Chinese bank were to buy into the irish banking system?
Would the fact that major european banks own the bonds be worth something to the chinese? What leverage would it give them?
i.e. why would they want to buy into our banks other than the fact that they have to do something with their surplus cash?

beeftotheheels

Voltex wrote: »

I was listening to David McWilliams this morning and his reaction to yesterdays events. He seems to be hitting a few good points at the moment and seems to be one of the only economists who is trying to come up with soemideas on how to effectivly deal with our banks in the absence of a commitment from frankfurt.
His plan in a nutshell

1. Immedieatly put all the Irish banks in examinership.
2. Look for a buyer
3. Ask the country with the World highest trade surplus and capital account surplus; China, if they would be interested in buying an irish banking system for €1 in exchange for re-capitilisation of the banks and for the return of the monies already supplied by the state.

Appraently the logic for such a plan lies in the fact that the Chiebse have been trying to gain access to the european banking sector for yeras without success and that the idea in Europe that the Chinese will have such a direct impact on the european banking system viz a viz owning a eurozone banking system...that the utter shock of it would prompt the ECB and the EU Commision into action on Irelands behalf.

Is McWilliams spoofin out his hole or is there some creditablity to this appraoch?

Assuming Barfizz is wrong on this being a 1 April stunt - it is daft.

The ECB who are lending our banks about €190bn odd would stop us putting them in examainership, if we tried to put our banks in examainership Trichet would put us into receivership! His job is to protect the eurozone banking system, not one little rogue member state. If we put our banks into examainership we would put the Spanish and Italian banks on the line and he could not tolerate that - he wouldn't be doing his job if he did.

He's right that the idea of the Chinese (whose currency is controlled) having European banks would cause ripples/ tsunamis in Europe. However, neither the Commission nor the ECB can further help us here. Only Merkel (and to a lesser extent Sarkozy etc) through the EFSF and EFSM is keeping us afloat/ can alter the terms to help us. So we'd cause panic by attempting to blackmail the wrong people, including one (Mr Trichet) who can't help us, but can pull the plug on us.

Daft!

I understand people's anger at the sheer scale of the banking debt. But we (and I take some responsibility for this despite the fact I never voted FF in my life) kept FF in power while they slept on the job or did worse. We (and I don't have a mortgage) fueled our own property bubble by borrowing stupid amounts to buy property.

While I didn't, I'm happy to take collective responsibility along with those nurses, teachers etc who did buy at those prices but our anger should be aimed at FF who did nothing to cool the markets.

But the Irish people allowed this situation to arise, so we must take some responsibility for resolving it. We just need to convince our EU friends to give us time and space to make good on this.

barfizz

Guys! it has to be an April fools joke.
McWilliams is not the smartest economist out there, but even he is not stupid enough to suggest such a solution seriously.

Raskolnikov

hmmm wrote: »

The man who gave us the guarantee idea* now has another great idea. I'll pass.

* and yes I know he had a series of "but I didn't mean them to implement it in this way" after it all went pear shaped.

We were within days of ATM's running out of cash and banks pulling down the shutters. Then they would have went into bankruptcy, we would have seen capital controls preventing people withdrawing anything more than a few hundred Euro a day, preventing a stampede of cash our of the country. When the disorderly wind-down was completed, anyone with deposits in a bank would have been paid out pennies on the Euro.

I suppose the plus side of that scenario would have been that we wouldn't have the debt we have now, and the banking system would have been repaired. The downside? People with deposits would probably have lost half their cash.

beeftotheheels

brianwalshcork wrote: »

Can anyone explain what would / could happen if the a Chinese bank were to buy into the irish banking system?
Would the fact that major european banks own the bonds be worth something to the chinese? What leverage would it give them?
i.e. why would they want to buy into our banks other than the fact that they have to do something with their surplus cash?

Madness - in short.

The Chinese currency is controlled. You cannot buy it outside China and you can only buy it in China for local use. It is undervalued vs global currencies making Chinese exports inexpensive and imports into China too expensive.

Non Chinese cannot buy more than 49% of any Chinese companies.

If the Chinese owned European banks they could access the European money markets by default. They could benefit from a system they not only "don't support", but they could benefit from a free economy they try to frustrate in so far as it applies to them.

It would be morally offensive, and economically risky. They wouldn't need to listen to the needs of Irish bank consumers, they could make up and impose whatever rules they liked on us. This being because a Chinese bank couldn't buy our banks, only the Chinese State (Chinese State Bank) could as their export controls and restrictions on private businesses means that the only Chinese entity in a position to do this would be the State.

Talk about a cure worse than the illness....

Raskolnikov

beeftotheheels wrote: »

While I didn't, I'm happy to take collective responsibility along with those nurses, teachers etc who did buy at those prices but our anger should be aimed at FF who did nothing to cool the markets.

What about some blame for the German and French banks? Oh I forgot, we must have put a gun to their heads and forced them to lend us the cash. Silly me.

chasmcb

Raskolnikov wrote: »

We were within days of ATM's running out of cash and banks pulling down the shutters. Then they would have went into bankruptcy, we would have seen capital controls preventing people withdrawing anything more than a few hundred Euro a day, preventing a stampede of cash our of the country. When the disorderly wind-down was completed, anyone with deposits in a bank would have been paid out pennies on the Euro.

I suppose the plus side of that scenario would have been that we wouldn't have the debt we have now, and the banking system would have been repaired. The downside? People with deposits would probably have lost half their cash.

In some ways that nearly seems a better overall scenario than the one we find ourselves in. Admittedly I speak as one without substantial deposits! p.s. Kinda apt your username should be the main character from Crime and Punishment lol

Raskolnikov

beeftotheheels wrote: »

The Chinese currency is controlled. You cannot buy it outside China and you can only buy it in China for local use. It is undervalued vs global currencies making Chinese exports inexpensive and imports into China too expensive.

All currencies are controlled. The United States will print Dollars to bailout their financial system, the ECB will manage interest rates to control inflation, Japan actively interferes in all portions of their capital structure on a regular basis. China pegging the Yuan to the Dollar is par for the course.

beeftotheheels wrote: »

Non Chinese cannot buy more than 49% of any Chinese companies.

That just applies to publically quoted companies. Yum! Brands (the owner of KFC) for example are free to own business within the sphere of the overall group.

beeftotheheels wrote: »

It would be morally offensive

I do agree with you on this. China is an apalling fascist and totalitarian dictatorship, it would be a mistake for Ireland to get into bed with them.

beeftotheheels

Raskolnikov wrote: »

What about some blame for the German and French banks? Oh I forgot, we must have put a gun to their heads and forced them to lend us the cash. Silly me.

We can go over this until the cows come home. The sheer number of people asleep on the job is staggering and it is difficult to put them in order of culpability so I'm not even going to try...

But you will note that I include the European banks once, and the EU once, and the Irish people at least three times...

The list is, in no particular order and please feel free to add to it...

The management of Anglo for coming up with this daft business model
The management of the other banks for buying into it and playing catch up
BoS (Ireland) for introducing 100% mortgages
The other banks for buying into it and playing catchup
Shane Ross, for calling on the Irish banks to mirror BoS (Ireland)
The Irish Government for not realizing we were in the mother of all property bubbles
The Irish people who elected the Irish government on the basis of how rich they could make us in the short term
The funds/ banks etc who lent to the Irish banks to support this business model
The Regulator for not realizing that our banks were over exposed to property and "key developers"
The Irish developers for behaving recklessly
The Irish banks for lending to said reckless developers
The Irish people for paying daft amounts to buy overpriced homes to support said reckless/ feckless developers
The government for believing that the banks had a liquidity crisis rather than a real crisis when introducing the blanket guarantee
Eddie Hobbs (why is this man back on telly) who tried to get Irish individuals to invest in property through his "Brendan" investment company as the market was already starting to crash...
The EU for failing to think through a single interest rate applicable to both Germany and Ireland
The Irish people for being addicted to property
The Brits for invading us 800 years ago, stealing our land, causing the famine and thus fueling our addiction to property the first chance we could afford it...

I'm running out of names, anyone think of any others?

Raskolnikov

chasmcb wrote: »

In some ways that nearly seems a better overall scenario than the one we find ourselves in. Admittedly I speak as one without substantial deposits! p.s. Kinda apt your username should be the main character from Crime and Punishment lol

It was essentially the Icelandic solution, just by the back door. While Icelandic deposit holders didn't actually lose money, their currency was effectively devalued by 60% during their financial crisis. For a small economy where most of the basics of life are imported (similar to Ireland), peoples wages would have stayed the same, while imported goods (Nintendo Wii's, Big Mac's, potatoes, etc.) would have doubled. You might as well be losing half your cash in such a scenario.

Raskolnikov

beeftotheheels wrote: »

We can go over this until the cows come home. The sheer number of people asleep on the job is staggering and it is difficult to put them in order of culpability so I'm not even going to try...

Beef, let me say one thing.

You're aware of the old saying, that if you owe the bank €100 that it's your problem, but if you owe the bank €1 million, it's their problem? If history has taught us anything, it's that it's the creditor, not the debtor that usually pays the cost mal-investment. I believe that Germany and France will be taught this lesson yet.

beeftotheheels

Raskolnikov wrote: »

All currencies are controlled. The United States will print Dollars to bailout their financial system, the ECB will manage interest rates to control inflation, Japan actively interferes in all portions of their capital structure on a regular basis. China pegging the Yuan to the Dollar is par for the course..

Not to the same extent. Pegging the Renminbi to the dollar is completely artificial and takes no account of the demands of the local economy which is closed to outside investors. It only takes into account the attractiveness of the Chinese export market.

Raskolnikov wrote: »

That just applies to publically quoted companies. Yum! Brands (the owner of KFC) for example are free to own business within the sphere of the overall group.

Not true. If Kerry (hypothetically, I know nothing about Kerry and China, I picked them as a large Irish MNC) wanted to set up a Chinese sub in the morning they would have to find Chinese investors to own a 51% stake. Good advisors would negate the impact of that to ensure that Kerry controlled "China sub" by default, but Kerry could not set up a 100% China sub. Kerry would tell their investors they owned China Sub, but that would involve a lot of hard work by their Irish and Hong Kong (and to a lesser extent Chinese) lawyers to make that the reality. The Chinese State would think that Chinese investors controlled Kerry China sub.

Raskolnikov

beeftotheheels wrote: »

Not to the same extent. Pegging the Renminbi to the dollar is completely artificial and takes no account of the demands of the local economy which is closed to outside investors. It only takes into account the attractiveness of the Chinese export market.

When you print money, buy your own sovereigns, that is a completely artificial way of controlling your currency. Basically no different to what the Chinese are doing.

beeftotheheels wrote: »

Not true. If Kerry (hypothetically, I know nothing about Kerry and China, I picked them as a large Irish MNC) wanted to set up a Chinese sub in the morning they would have to find Chinese investors to own a 51% stake. Good advisors would negate the impact of that to ensure that Kerry controlled "China sub" by default, but Kerry could not set up a 100% China sub. Kerry would tell their investors they owned China Sub, but that would involve a lot of hard work by their Irish and Hong Kong (and to a lesser extent Chinese) lawyers to make that the reality. The Chinese State would think that Chinese investors controlled Kerry China sub.

Tell that to Yum! Brands, their Chinese subsidiary is 100% controlled by the American-domiciled parent.

beeftotheheels

Raskolnikov wrote: »

Tell that to Yum! Brands, their Chinese subsidiary is 100% controlled by the American-domiciled parent.

Did you do the legals? If No, I'll continue to doubt you and put you into my Kerry example of China understanding one scenario and her investors understanding another, and if yes, I doubt that you can say.

I certainly can't comment on the specifics of any Chinese deals I have done and I've done a few.

View

Raskolnikov wrote: »

We were within days of ATM's running out of cash and banks pulling down the shutters. Then they would have went into bankruptcy, we would have seen capital controls preventing people withdrawing anything more than a few hundred Euro a day, preventing a stampede of cash our of the country.

Capital Controls within the EU have been illegal since 1992, so there would have no preventing of any stampede. The Irish banks would have just crashed completely. Mind you the non-Irish ones here would probably have coped due to their larger parents and our banks today would probably be RBS and Danske Bank (aka Ulster Bank & NIB).

Some of us would certainly be much worse off if that had happened...

View

Voltex wrote: »

I was listening to David McWilliams this morning and his reaction to yesterdays events. He seems to be hitting a few good points at the moment and seems to be one of the only economists who is trying to come up with soemideas on how to effectivly deal with our banks in the absence of a commitment from frankfurt.
His plan in a nutshell

1. Immedieatly put all the Irish banks in examinership.
2. Look for a buyer

Why didn't he come up with this plan back in October 2008? What exactly was achieved by not putting them into examinership?

Any company that needs to be given a blank guarantee from the tax-payer to save it from going bust is by definition a candidate for examinership and/or receivership.

Raskolnikov

View wrote: »

Capital Controls within the EU have been illegal since 1992, so there would have no preventing of any stampede. The Irish banks would have just crashed completely. Mind you the non-Irish ones here would probably have coped due to their larger parents and our banks today would probably be RBS and Danske Bank (aka Ulster Bank & NIB).

Some of us would certainly be much worse off if that had happened...

The EU dictate that we can't do a lot of things, but we still do them (the terms of Eurozone membership dictate that a country must not have a deficit of greater than 3%, ours is 12-15% depending on which source you read).

I agree with your point though, we would have seen unforetold consequences of allowing our banks to fail.

Amhran Nua

beeftotheheels wrote: »

His job is to protect the eurozone banking system

Nope, his job is to ensure that inflation doesn't exceed a certain rate. The ECB and by extension Trichet, who has been involved in a couple of very dubious banking deals himself in is time, are operating way beyond their remit.

beeftotheheels wrote: »

But we (and I take some responsibility for this despite the fact I never voted FF in my life) kept FF in power while they slept on the job or did worse. We (and I don't have a mortgage) fueled our own property bubble by borrowing stupid amounts to buy property.

You keep using that word. I do not think it means what you think it means.

View

Raskolnikov wrote: »

The EU dictate that we can't do a lot of things,

We are the EU just like the other member states are too. These are measures that we agreed to at EU level not something "dictated" to us.

Raskolnikov wrote: »

but we still do them (the terms of Eurozone membership dictate that a country must not have a deficit of greater than 3%, ours is 12-15% depending on which source you read).

We can and do break the law on occasion. The breech of the deficit limit has resulted in an Excessive Deficit Procedure being triggered against us (as indeed it has for almost all other states post the 2008 crisis). The purpose of the EDP is to bring us back inside the criteria by an agreed date - 2014 at the latest. Failure to do so carries financial penalties in the form of a bond which we would have to post first and - if we continue to fail to meet the criteria - a fine second (i.e. we forfeit the bond).

By way of contrast, capital controls would just be a blatant breech of the relevant rules. I doubt the state could persuade our courts - never mind the ECJ - of the legality of its action. Fines would follow quickly in other words.

Raskolnikov

View wrote: »

We are the EU just like the other member states are too. These are measures that we agreed to at EU level not something "dictated" to us.

I am not questioning this, in no respect whatsoever. When Europe asked us to sign on the dotted line, we readily put down our John Hancock down for Maastricht, Lisbon, and every document we were told to sign (sometimes grudgingly). Jobs and prosperity is what we were promised by the incumbent political parties (Fine Gael, Labour, Fianna Fáil) in 2009, if we signed up for Lisbon.

On behalf of the Irish people, can I just say I am thrilled that our political system managed to deliver on their promises for the referendum campaign. 15% unemployment - merci beaucoup Europe!

beeftotheheels

Amhran Nua wrote: »

You keep using that word. I do not think it means what you think it means.

Nicely put sir

"We" means the Irish people in this instance. If you accept that we are a democracy (and I'm not arguing the merits of that), then you have to accept that the Government formed after a general election represents us as the Irish people.

A majority of people do not have to vote for that government in order for it to be elected. If a majority had voted in 2007 for FG/Lab and FF somehow illegally clung onto power then they would not have represented us. However, they had no need to do this, they were given a mandate by the electorate. And regardless of whether you voted for them (and I personally didn't) they represented us.

Amhran Nua

beeftotheheels wrote: »

However, they had no need to do this, they were given a mandate by the electorate. And regardless of whether you voted for them (and I personally didn't) they represented us.

Its very arguable that they had any kind of mandate by the time they started handing out guarantees, but unfortunately the Irish electoral system does not include mechanisms for a recall referendum.

There are a lot of roads you could go down with this, but I prefer the one that best represents reality. And the reality is that collective responsibility and collective punishment are both unjust and dangerous, as they lead to backlashes and bad feeling. They are a foolishly broad brush at minimum.

So no, we are not responsible, many if not most people in the country would strenuosly object to being placed in a group to which they were opposed at the time. Further, collective responsibility is most used by those trying to spread the blame for their own guilt around in an effort to mitigate the results, clearly this is even less acceptable.

View

Raskolnikov wrote: »

I am not questioning this, in no respect whatsoever. When Europe asked us to sign on the dotted line, we readily put down our John Hancock down for Maastricht, Lisbon, and every document we were told to sign (sometimes grudgingly).

You seem to be confused - we voted to join an organisation with certain goals. When steps towards those goals are proposed, our governments aren't told to sign - they want to sign because they want to see those goals achieved because that is what we voted for when we voted to join.

Obviously, if we didn't want to see those goals achieved, then we have no business being in an organisation working towards those goals and should leave it asap.

If you note though, even our more obvious Euro-sceptics confine themselves to "I'm not against the EU but I am against this latest treaty" as they lack the courage to advocate that.

Raskolnikov wrote: »

On behalf of the Irish people,

Congratulations on your mandate to represent the people.

View

Amhran Nua wrote: »

Its very arguable that they had any kind of mandate by the time they started handing out guarantees, but unfortunately the Irish electoral system does not include mechanisms for a recall referendum.

There are a lot of roads you could go down with this, but I prefer the one that best represents reality. And the reality is that collective responsibility and collective punishment are both unjust and dangerous, as they lead to backlashes and bad feeling. They are a foolishly broad brush at minimum.

So no, we are not responsible, many if not most people in the country would strenuosly object to being placed in a group to which they were opposed at the time. Further, collective responsibility is most used by those trying to spread the blame for their own guilt around in an effort to mitigate the results, clearly this is even less acceptable.

Or, in other words, I reject democracy here as I disagree with a decision that was made.

Amhran Nua

View wrote: »

Or, in other words, I reject democracy here as I disagree with a decision that was made.

In other words, I recognise that once a party has been elected in Ireland there are no means short of open armed rebellion to remove them, and I recognise that FF recognised that as well, and used it to their advantage to do whatever they pleased, which neatly explains Cowen binge drinking through his term in office.

Do you think the majority of Irish people, given the opportunity, would have followed Lenihan down this rabbit hole? There was no shortage of outraged commentary from any corner at the time.

beeftotheheels

Amhran Nua wrote: »

In other words, I recognise that once a party has been elected in Ireland there are no means short of open armed rebellion to remove them, and I recognise that FF recognised that as well, and used it to their advantage to do whatever they pleased, which neatly explains Cowen binge drinking through his term in office.

Do you think the majority of Irish people, given the opportunity, would have followed Lenihan down this rabbit hole? There was no shortage of outraged commentary from any corner at the time.

I understand your anger at this but the bigger question is whether we would be in this rabbit hole without 3 successive FF led governments? I don't have a crystal ball so I can't answer that, but reelecting FF in 2002 and (more nonsensically) in 2007 when it was already becoming apparent that

a) They were not above taking a "dig-out" from a few mates, and
b) the property bubble was losing air

It certainly did nothing to fix the problem.

So you're right, we elect them to be our plenipotentiaries (and we are probably the only electorate in the world who actually understand what that means... **drifts off into fond memories of my history teacher telling us that Lord Birkenhead commented that he might be signing "his political death warrant" and the bould Mr Collins responding that he may have been signing his actual death warrant**

I digress, the thing about plenipotentiaries as our history has thought us (and arguably with slightly more serious repercussions than bringing in the EU/IMF, I do find myself having to disagree with commentators who say that the day the EU/ IMF came to town was the blackest day in our history, it might be the blackest day this century...) is that once you make someone a plenipotentiary you have empowered them to act on your behalf, even if they act in a manner with which you do not agree.

That's democracy, like it or loath it.

I think there is a valid discussion to be had as to whether Irish people can be trusted with democracy given the mess we have made of it since our independence, but that is for another thread...

Our democratically elected plenipotentiaries helped create this bubble, they did nothing to deflate it, and it will take us a long time to recover. But we (the Irish electorate) returned FF to power time and again... The day the EU/IMF came to town, or even the day of the bank guarantee was not the day this went wrong, the writing was already on the wall by then. This problem was created by CMcC in Finance, and made worse by BC in his days in Finance. BL got the poisoned chalice, and while he may have made huge errors of judgement, he was between a rock and a hard place. I doubt if there was any option open to him by then which would leave us in a nice place now.

The real blame is on his predecessors and their Taoiseach Mr Ahern who could have done many things to stop this and didn't, and the Irish people returned them to power again and again.

newmug

^^^^^^^^^^^^^ The Irish people are not experts on economics. They vote based on results. The thing is, that its taken for granted (naively) in this country that people, especially professional people, behave honestly and with integrity. People like doctors, guards, politicians, so if a politician says "Everything is grand, the economy is thriving, there's no corruption and we know what we're doing", the Irish people will believe them.

Things were going well when FF were in power, hence why they kept being re-elected. When things went pear-shaped, the Irish people booted FF out. Simple. The electorate is a reactionary body. You cant blame the Irish people for continuing to re-elect FF while FF lied and colluded. The blame is at FF's door for lying and colluding in the first place.

[Jackass]

later10 wrote: »

Michael O'Leary has proven himself in the commercial world; McWilliams has excelled neither in commerce nor in academia, he is a media man whose career is dependent on the whims of that industry. He does his best to say what sounds popular. I would be wary of taking seriously the economic advice emanating from such an individual.

Step one assumes that the court would rule that the banks can be sold as a going concern and that they have a tangible future in and of themselves. For starters, the good thing about being in McWilliam's position on the sideline is that nobody will ask him what happens if that doesn't occur.

McWilliams is actually a very well credited Economist with some excellent ideas and is an extremely capable Economist.

Search around on youtube for his video on the late late where he accuartly predicted the exact scenario we are in now, all be it his doom and gloom date was a lot earlier, how was he to know the previous Government would be so adept at dragging out the bubble into deeper and deeper waters until the massive pop.

These in the times that people were paying half a mill for a two bed apartment in dublin and Bertie was calling the opposition scare mongorors for expressing concerns over the Economy...

K-9

[Jackass] wrote: »

McWilliams is actually a very well credited Economist with some excellent ideas and is an extremely capable Economist.

Search around on youtube for his video on the late late where he accuartly predicted the exact scenario we are in now, all be it his doom and gloom date was a lot earlier, how was he to know the previous Government would be so adept at dragging out the bubble into deeper and deeper waters until the massive pop.

These in the times that people were paying half a mill for a two bed apartment in dublin and Bertie was calling the opposition scare mongorors for expressing concerns over the Economy...

He also advocated the guarantee and said we'd have foreign banks coming here in droves by now.

Yitzhak Rabin

[Jackass] wrote: »

These in the times that people were paying half a mill for a two bed apartment in dublin and Bertie was calling the opposition scare mongorors for expressing concerns over the Economy...

It wasn't the opposition that were expressing concerns. They were calling for more spending and abolition of stamp duty to allow young couples get on the property ladder.

later12

[Jackass] wrote: »

McWilliams is actually a very well credited Economist

By whom?

I'm not saying that he doesn't understand his subject or is a poor economist. I'm saying that he is first and foremost a media man whose job is in the media, be that as a tv presenter, a chat show host, a stand up comic or an author of popular literature. His career depends on publicity. As such, his 'views' must be seen in that light.

If you take other economists, such as Wolfgang Munchau, Martin Wolf or, in Ireland Rossa White they did predict this sort of crisis to an extent (White on house prices, Wold on the Eurozone, Munchau on everything) but they also write credibly and with economic evidence both on what they have witnessed and on what they deduce to be weighted likelihoods. McWilliams's commentary has no such rhyme nor reason - it's usually mere publicity which may or may not be correct (and when it isn't, people often forget).

Hayte

Voltex wrote: »

Look for a buyer

This right here is the funny part.

fred252

later10 wrote: »

By whom?

I'm not saying that he doesn't understand his subject or is a poor economist. I'm saying that he is first and foremost a media man whose job is in the media, be that as a tv presenter, a chat show host, a stand up comic or an author of popular literature. His career depends on publicity. As such, his 'views' must be seen in that light.

If you take other economists, such as Wolfgang Munchau, Martin Wolf or, in Ireland Rossa White they did predict this sort of crisis to an extent (White on house prices, Wold on the Eurozone, Munchau on everything) but they also write credibly and with economic evidence both on what they have witnessed and on what they deduce to be weighted likelihoods. McWilliams's commentary has no such rhyme nor reason - it's usually mere publicity which may or may not be correct (and when it isn't, people often forget).

are those guys not journalists? do you need to be involved in more than one form of media to be a "media man"?

can we discuss the proposition rather than the usual david mcw bashing?

fred252

Hayte wrote: »

This right here is the funny part.

we'd need to amalgamate our banks into maybe 2. give the old money debt for equity with some sort of kicker. (changing the laws if neccessary). anyone with > 100K deposits take a hair cut on the amount > 100 k (as with the danish bank recently). then the potential new money will be a lot more interested.

later12

fred252 wrote: »

are those guys not journalists? do you need to be involved in more than one form of media to be a "media man"?

Well they are associate editors of the FT and their careers depend on 'getting it right' as opposed to advancing what is merely popular, Munchau has worked as an academic and Wolf's record speaks pretty much for itself. Rossa White is Chief Economist at the NTMA and former Chief Economist with Davy.

McWilliams, undeniably, has come out with more populist and unworkable opinions than you could shake a stick at. As Garrett FitzGerald said over the weekend

"For smaller states like Ireland they depend on second-hand information. This includes often ill-informed media reports, which in our case have involved reports of some of the 'celebrity economists' who have been seeking publicity by claiming that our problems are so great that we will eventually have to default.
"Some have indeed proposed that we should take that course now despite the impact this could have on our only current source of future borrowing -- the EU-IMF bailout.
"The damage to our standing abroad by such irresponsible statements has been incalculable. It is difficult enough for our own people to distinguish between serious economic commentators in Ireland and irresponsible voices -- it is impossible for foreign observers of our finances to do so," he wrote.

http://www.independent.ie/national-news/celeb-mcwilliams-hits-back-at-fitzgeralds-cheap-shot-jibe-2607505.html

fred252

later10 wrote: »

Well they are associate editors of the FT and their careers depend on 'getting it right' as opposed to advancing what is merely popular, Munchau has worked as an academic and Wolf's record speaks pretty much for itself. Rossa White is Chief Economist at the NTMA and former Chief Economist with Davy.

McWilliams, undeniably, has come out with more populist and unworkable opinions than you could shake a stick at. As Garrett FitzGerald said over the weekend


http://www.independent.ie/national-news/celeb-mcwilliams-hits-back-at-fitzgeralds-cheap-shot-jibe-2607505.html

Garrett FitzGerald, seriously? Gimme a break

theofficepest2

later10 wrote: »

Well they are associate editors of the FT and their careers depend on 'getting it right' as opposed to advancing what is merely popular, Munchau has worked as an academic and Wolf's record speaks pretty much for itself. Rossa White is Chief Economist at the NTMA and former Chief Economist with Davy.

McWilliams, undeniably, has come out with more populist and unworkable opinions than you could shake a stick at. As Garrett FitzGerald said over the weekend


http://www.independent.ie/national-news/celeb-mcwilliams-hits-back-at-fitzgeralds-cheap-shot-jibe-2607505.html

Garrett Fitz? Now there's a man you should listen to alright, that is if you want to know how to run a country into the ground, are you too young to remember the 1980's. I suppose it's easy for him to through these things around as he's clearly forgotten all his mistakes due to his vast age if anyone has seen his disasterous doddery Vincent Browne appearences lately or his appearence on the Election 2011 coverage.



What international reputation are we supposed to be damaging here, we have none to ruin. Intl Corps are here cause it suits them financially, end of, look at Dell

As far all ill-informed maybe you should read some of his article before you agree with that, there's plenty of them

http://www.davidmcwilliams.ie/category/articles/


I listened to him back in 1999 and it was the best bit of advice I have ever taken, it made sense and it still does, it's saved me about 250,000, luckily I was in a position where I didn't haave to buy a house, plenty weren't so lucky (not everyone can rent, that is a myth)

theofficepest2

also, McWs career is based on broadly getting it right

No one is perfect, no one can see the future, even he said that housing prices would collapse 5-6 year before they did, does this make him wrong?

Never take what anyone preaches as fact, make up your own mind people

This applies to boards as well as real life (which boards so isn't)

I listened to opinion then I looked at what I actually saw in real life, section 23 (scam) apts with an asking price of 650 for a 2 bed apt which meant no residential buyers could afford them, newly built apts blocks lying mostly empty in dundrum close to the luas, built in 2004 (this is 2005, tying neatly in with McWs (in one of his books, maybe the popes children) predictions of developers sitting on properties rather than sell them at a lower price), the fact that although I am paid a good wage I couldn't afford to buy a house in co dublin, even one in a bland estate of poorly built houses with no amenities and no infrastructure meaning years of traffic gridlock, all these pointed to a bubble and you don't buy into a bubble

Thanks David, by being a calabriitty economist, you managed to make it onto the late late show and break into the secret society that is rte and therefore I did hear what you had to say, fair play to you

Ourp :pac:

ei.sdraob

http://www.irisheconomy.ie/index.php/2011/04/05/celebrity-economists/

I picked 15 names of Ireland-based economists, google-newsed and publish-and-perished them. Here are the results.

Table 1. Number of hits in Google News, number of citations in Publish-or-Perish (i.e., Google Scholar) and Celebrity Index.

News	P&P	Celeb
D. McWilliams	1188	0	inf
R. Lyons	119	5	23.80
C. Gurdgiev	113	17	6.65
S. Kinsella	31	5	6.20
C. McCarthy	710	139	5.11
J. Fitzgerald	571	393	1.45
A. Barrett	350	978	0.36
B. Lucey	199	628	0.32
M. Kelly	201	767	0.26
A. Ahearne	142	1119	0.13
J. McHale	62	928	0.07
K. Whelan	122	2000	0.06
R. Tol	242	6412	0.04
P. Lane	84	7384	0.01
J. Markusen	3	14573	0.00

RichardAnd

My own take on McWilliams is that he does do alot of what I would deem showman tricks. That thing he did in Kilkenny where he mixed stand up comedy with economics would be an example of this.

However, he does get some things right and no one cane ever be 100%. I listen to what he says but I don't take it as be sacrosanct, simply as useful information that can be taken as part of a greater picture.