Ireland, debt, europhillia and the rantings of a mad man

Lefticus Loonaticus

“In the backrooms in Dublin it was our [state-owned] Landesbanks earning all the money to the delight of our state governments of all political persuasions. No one tells the people here that part . . . a bit of the reality is being kept from view.”

- Said by former German foreign minister Joschka Fischer

(taken from a Fintan O'Toole article on the 3rd of May last
http://www.irishtimes.com/newspaper/opinion/2011/0503/1224295913381.html)

Maybe if germany would bailout its own banks instead of making us do it? Irish people have explicably said time and time again that we want nothing to do with any of this debt. And then the ECB and Merkel Bully our chicken****less leaders into doing it. Its so disgraceful its unbelievable.

If you take into account the brazen subversion of our democracy with the second lisbon referendum, then look at how we are getting nailed with this debt which isnt ours, and then take into consideration how much control we are going to lose to a centralized europe, it is clear that none of this is good for Ireland.

If the above is indicative of how a future european superstate is going to act, we need to seriously consider getting out of it over the next decade or so. A superstate needs to be founded in a properly democratic, decent and open fashion. Not by deception and subversion. It will just turn into another semi fascist wannabe empire like the USA and China are right now. Do we want to be apart that really?

I dont know about you guys, but no one has ever consulted me as european citizen about what I would like to see happen. MEPs that I vote for have zero, let me repeat that, ZERO power, and this EU Commission crowd is a scandalously undemocratic elite europhile club who have their own agenda seperate from the 450+million people they are acting on behalf.

I know europe has been good to us in various ways previously, but
we now need to think about going the way of switzerland or norway. And we should also think about cutting as much of the deficit as fast as possible. Maybe some sort of an all party agreement around tax hikes and spending cuts to try and do it in one or two swoops. This clearly has to be done, we cant just stay this position where our testicales are being sqeezed by outside forces.

'But its our own fault, we have to be responsible?'

What a load of bollix. Its the fault of over 40% of people who voted for FF consistantly. The other bulk of the electorate had nothing to do with it. FF are now out but somhow we all still have to be penitent.

For all we know at this stage the whole thing could have been concocted intentionally by the ECB to further the agenda of a superstate. IMO isnt it so damn convenient that the answer to the problem is for centralized power. So basically we are just going to forfeit Ireland's future and self respect because of a bank guarentee that in itself was a treasonous act and should never have been signed.

Enda Kenny comes back with a cut in the interest rate. Enda, with all do respect, we are not paying any of this debt back. We are going to default on it because its both the right thing and the only thing to do. Over another governments dead body will Irish people give up anymore sovereignty.

Even if debt sharing is the plan, why should any peoples of any european country have to pay for any bank debt at all. Just so the banks can keep there priviliged position as public parasite number one??? They should be thrown to the wolves like the rest of us.

meglome

Lefticus Loonaticus wrote: »

If you take into account the brazen subversion of our democracy with the second lisbon referendum, then look at how we are getting nailed with this debt which isnt ours, and then take into consideration how much control we are going to lose to a centralized europe, it is clear that none of this is good for Ireland.

I was going to reply but I only got as far as the second paragraph.

How do you figure that having more democratic votes is less democratic? Is there some law I'm missing which forbids the calling of a referendum or a second or a third? Who exactly borrowed all the money in the first place? How do you figure we are losing control to centralised Europe?

Laminations

meglome wrote: »

Who exactly borrowed all the money in the first place?

Eh, that'd be the banks, then they loaned it on to retailers, businesses, developers and individuals.

No one is arguing that individuals shouldn't have to pay back their individual loans (mortgages, credit cards etc), if you borrowed you pay back. What people are against is paying back the debts of others. What should I pay back Sean Fitzpatricks million euro loans or Johnny Ronans credit cards etc or any Joe Bloggs' debt? The actual debtors should've been pursued and if they could not pay back then let it fall at the feet of the bank, a lesson in bad lending practices and let the bank, shareholders and bondholders take the hit - afterall, they took the profits when the money was rolling. What should never have taken a hit due to developers going bust is Irelands reputation for sovereign debt repayment. We should never have been tied to Anglo and all deals should've been cut as the banks misrepresented their losses to the state. Bondholders should've taken the bath they expected and only depositors should've been protected. I'd even accept depositor haircuts varying in magnitude relative to the recklessness of the institution. At least those depositors being hit had dealings with the banks. Instead we have a scenario where every man woman and child regardless of whether they were involved with any bank being hit for (what is it now? 20+ k?)

Son Of A Vidic

Lefticus Loonaticus wrote: »

Enda Kenny comes back with a cut in the interest rate.

Despite Enda's attempt to claim the credit, it was the Greece crisis that prompted the better terms and nothing else.

meglome wrote: »

I was going to reply but I only got as far as the second paragraph.

Why even post such an irrelevant comment? Because it says more about you than the OP.

meglome wrote: »

How do you figure that having more democratic votes is less democratic? Is there some law I'm missing which forbids the calling of a referendum or a second or a third?

Sure if that's the case why not have two or perhaps three re-runs of the General Election then? The second Lisbon vote set a very dangerous precedent in this country. Our government essientially disregarded the results of a legitimate and democratic election, because they and their European masters did not like the result.

meglome

Laminations wrote: »

Eh, that'd be the banks, then they loaned it on to retailers, businesses, developers and individuals.

I know exactly who it was but from the OP's rant it appears to be some unknown evils doers. When it was us as a people who either did it or allowed it happen.

Laminations wrote: »

No one is arguing that individuals shouldn't have to pay back their individual loans (mortgages, credit cards etc), if you borrowed you pay back. What people are against is paying back the debts of others. What should I pay back Sean Fitzpatricks million euro loans or Johnny Ronans credit cards etc or any Joe Bloggs' debt? The actual debtors should've been pursued and if they could not pay back then let it fall at the feet of the bank, a lesson in bad lending practices and let the bank, shareholders and bondholders take the hit - afterall, they took the profits when the money was rolling. What should never have taken a hit due to developers going bust is Irelands reputation for sovereign debt repayment. We should never have been tied to Anglo and all deals should've been cut as the banks misrepresented their losses to the state. Bondholders should've taken the bath they expected and only depositors should've been protected. I'd even accept depositor haircuts varying in magnitude relative to the recklessness of the institution. At least those depositors being hit had dealings with the banks. Instead we have a scenario where every man woman and child regardless of whether they were involved with any bank being hit for (what is it now? 20+ k?)

There's no doubt in the mind that the blanket guarantee was a bad idea. However the government we elected (again) decided it was a good idea. All ancient history now in many respects as we can't go back and change it. Besides it's the deficit that really worries me, at least the banks will be worth something at the end of the day.

Corvus Maximus wrote: »

Despite Enda's attempt to claim the credit, it was the Greece crisis that prompted the better terms and nothing else.

There's no doubt he did a good job out there, even if was just bringing some humility into the discussions unlike the FF approach.

Corvus Maximus wrote: »

Why even post such an irrelevant comment? Because it says more about you than the OP.

I merely was pointing out that he posted a one sided rant. And I asked some questions to see if I was correct in my view on that.

Corvus Maximus wrote: »

Sure if that's the case why not have two or perhaps three re-runs of the General Election then? The second Lisbon vote set a very dangerous precedent in this country. Our government essientially disregarded the results of a legitimate and democratic election, because they and their European masters did not like the result.

The second Lisbon vote didn't set any precedent as we have rerun referendums several times before that. The same constitution that ensures we get to vote in these referendums doesn't stop them being called again if the democratically elected government decide it should happen. If you don't like the constitution you should campaign to have it changed. Given the decisive nature of the second vote it looks clearly like the government were correct to rerun it. To be honest as much as I have no love for our previous government they should have been in a better position to decide on a complex treaty rather than Paddy the carpenter down the road.

Laminations

meglome wrote: »

I know exactly who it was but from the OP's rant it appears to be some unknown evils doers. When it was us as a people who either did it or allowed it happen.

See, you say you know who it was but then you conflate private autonomous banks with 'us as a people'

There's no doubt in the mind that the blanket guarantee was a bad idea. However the government we elected (again) decided it was a good idea. All ancient history how in many respects as we can't go back and change it. Besides it's the deficit that really worries me, at least the banks will be worth something at the end of the day.

But I'd argue the government, elected or otherwise, had no right to sign it's citizens up to such a deal. If the government said they'd offer Ireland's newborns to repay the debt would you argue that 'oh well we have to hand em over cos the government promised'. Besides they gave the blanket guarantee on misinformation.

Scofflaw

“In the backrooms in Dublin it was our [state-owned] Landesbanks earning all the money to the delight of our state governments of all political persuasions. No one tells the people here that part . . . a bit of the reality is being kept from view.”

It would be nice to see the original quote in context, because there is no particular reason that this statement means what Fintab O'Toole uses it to imply here. The Landesbanks were (and are) in Dublin earning money through the use of Ireland's CT rate and setup. Fintan is using it to imply that they were the ones pumping money into the Irish bailed-out banks, but that may well not be the origin of the quote, and there is a complete lack of other evidence for the claim.

cordially,
Scofflaw

View

Scofflaw wrote: »

It would be nice to see the original quote in context, because there is no particular reason that this statement means what Fintab O'Toole uses it to imply here. The Landesbanks were (and are) in Dublin earning money through the use of Ireland's CT rate and setup. Fintan is using it to imply that they were the ones pumping money into the Irish bailed-out banks, but that may well not be the origin of the quote, and there is a complete lack of other evidence for the claim.

cordially,
Scofflaw

Indeed, the likelihood is that Fischer was referring to the IFSC operations of the Landesbanken which traded internationally and had little, if anything, to do with domestic banking business in Ireland.

And, for the benefit of the OP, the German tax-payer, along with the tax-payers in other EU member states, also had to "bail-out" their own banks when they got into financial trouble. In addition, they also bailed-out DePfa Bank, which operates out of the IFSC and which was - if memory serves me right - easily the biggest bank in Ireland when the German tax-payer had to pay out for it (and lest anyone be unclear it is an Irish bank).

meglome

Laminations wrote: »

See, you say you know who it was but then you conflate private autonomous banks with 'us as a people'

If I give someone access to a gun and they point it straight at their foot and fire, should I be responsible or should they take personal responsibly for their actions. Now of course the gun watchdog should have made sure I was actually following the rules or even setting new rules where necessary. That won't change the fact someone shot themselves in the foot though.

Many people went mad with cheap credit, personally I didn't. However many of my fellow citizens did. There's plenty of blame to be spread around.

Laminations wrote: »

But I'd argue the government, elected or otherwise, had no right to sign it's citizens up to such a deal. If the government said they'd offer Ireland's newborns to repay the debt would you argue that 'oh well we have to hand em over cos the government promised'. Besides they gave the blanket guarantee on misinformation.

Well legally they did have the right to do it. I don't agree with it and I'm sure at this stage most people don't. We kept electing a bunch of corrupt fools, again I didn't but many many people did. We reaped what we as a nation sowed. I'd love to have a way to go back and change it but that's not possible.

View

Laminations wrote: »

But I'd argue the government, elected or otherwise, had no right to sign it's citizens up to such a deal.

Well, the Supreme Court is always there to listen to reasonable arguments. I doubt your arguments would prove successful though.

Laminations wrote: »

If the government said they'd offer Ireland's newborns to repay the debt would you argue that 'oh well we have to hand em over cos the government promised'.

Whatever about meglome's views on that point, the Supreme Court probably wouldn't view such an arrangement favourably.

feicim

meglome wrote: »

If I give someone access to a gun and they point it straight at their foot and fire, should I be responsible or should they take personal responsibly for their actions. Now of course the gun watchdog should have made sure I was actually following the rules or even setting new rules where necessary. That won't change the fact someone shot themselves in the foot though.

To be honest, if you are stupid enough to give a person who is stupid enough to shoot themselves in the foot with it - then I think its pretty clear you have to accept some of the responsibility.

Take all the so called "stupid" people who borrowed more money (for a house) than they can't now afford to pay back.

Why did they do this? What is the context in which they made their decision? Property was massively advertised in this country. It was heavily pushed by the government, the media etc.

Now, there is a reason companies pay for advertising - because it makes people do things that the advertising suggests to them.

That is how human beings work, psychologists and advertisers have figured this out many years ago.

Now - if a country's government and media are complicit in promoting housebuying/the property market as this great get rich quick scheme (for the middle classes) that can't fail - there is only going to be one result..

Simple - people will do it - thats what they did - people did exactly as the property market promoters wanted them to do.

Now - bearing that in mind - there is a large element of responsibility that the government and the media should accept. They both played a key role - along with the banks who loaned out several multiples of a persons annual salary.

The government and the media and the banks pursued a certain way of doing things - and achieved what the wanted to achieve (a vibrant and lucrative property pyramid scheme) so.. I would have to say they are in large part responsible.

The policies designed to entice people into taking out large mortgages that were successfully implemented and pursued. People did as expected - borrowed money and spent it - then the government/banks/media all turn around Pontius Pilot style and wash their hands of any responsibility.

It would be funny if it wasn't so serious...

feicim

meglome wrote: »

If I give someone access to a gun and they point it straight at their foot and fire, should I be responsible or should they take personal responsibly for their actions. Now of course the gun watchdog should have made sure I was actually following the rules or even setting new rules where necessary. That won't change the fact someone shot themselves in the foot though.
.

And another thing

If the gun watchdog was told by the hospital to be a bit lax on the old regulations (because the hospital was making lots of money sewing peoples toes/feet back on from accidental shootings).

And the government/media were telling people how great it was to shoot yourself in the foot...

Who is responsible now? You? The gun watchdog? The hospital? The idiot who shot his toe off? The government?

All of the above?

The person at the end of the chain is 100% liable - its their toe after all - however I wouldn't agree that they are 100% responsible.

Laminations

meglome wrote: »

If I give someone access to a gun and they point it straight at their foot and fire, should I be responsible or should they take personal responsibly for their actions. Now of course the gun watchdog should have made sure I was actually following the rules or even setting new rules where necessary. That won't change the fact someone shot themselves in the foot though.

Many people went mad with cheap credit, personally I didn't. However many of my fellow citizens did. There's plenty of blame to be spread around.

Im not arguing against personal responsibility. Im arguing for it. Your gun analogy a crazy conception of personal responsibility. I agree that the person who shoots rhemselves is ultumately responsible but of course you bare some responsibility if you give someone a gun who is unable, unqualified or unwilling to use it correctly. A more appropriate analogy would be if they shot themselves and you. Then what right do you have in harvesting my organs to save yourself when I was in no way involved in the transaction?

See I think you are confusing personal responsibility, which I agree with, with collective responsibility, which I dont.

In a lending situation there is an easily identifiable line of credit and therefore a line of obligation/responsibility. Bondholder A invests in Bank B who lends to Punter C. Punter C is responsible to B who is responsible to A. If Punter C cannot pay, Bank B still needs to try and fulfill it's responsibility and repay A and absorb any loss. Likewise if Bank B is absolutely unable to pay (after wiping out shareholders etc) then that's tough luck on Bondholders at the top of the chain. They need to absorb the losses. That's personal responsibility, being pursued for your debts until you have nothing left to give, and being responsible for your loans and investments. At no point should A,B or C be allowed go outside that chain and make someone else responsible for the credit owed to them. Not without their expressed permission. Thinking that Punter Z should stump up for Punter C, just because he lives in the same country is collective responsibility.

Would you agree with it if it happened more directly? If some bank you never heard of or dealt with just knocked on your door and started to repossess your things because when they went to your neighbour who owed them money his house was bare? What if the government told them they could?

Collective responsibility would see the targeting of civilians in a war as legitimate as afterall they voted for the government who is waging the war.

View wrote: »

Whatever about meglome's views on that point, the Supreme Court probably wouldn't view such an arrangement favourably.

So you agree that the government has limits or at least should have limits on what obligations it can sign it's citizens up to? You just disagree that those limits involve enslaving the nation with the debts of private banks.

View

Laminations wrote: »

So you agree that the government has limits or at least should have limits on what obligations it can sign it's citizens up to?

Yes, I do - its decisions are bound by the provisions of BnahE, the EU Treaties and other international agreements.

Laminations wrote: »

You just disagree that those limits involve enslaving the nation with the debts of private banks.

I am of the opinion that should you take your arguments to the Supreme Court (and/or other courts) that they would not rule in your favour. You would need to point out - to the court - where exactly the Oireachtas is/was prevented from making the decisions that it made. Offhand, I know of no legal provision(s) that prevents the Oireachtas from having made the decisions that it made.

Laminations

View wrote: »

I am of the opinion that should you take your arguments to the Supreme Court (and/or other courts) that they would not rule in your favour. You would need to point out - to the court - where exactly the Oireachtas is/was prevented from making the decisions that it made. Offhand, I know of no legal provision(s) that prevents the Oireachtas from having made the decisions that it made.

well I'm not legally minded but a quick look at the constitution
The section on private property

1.*** 1° The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.

2° The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

2.*** 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.

2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.

The government cannot claim their banking strategy has been socially just, so we move to 2°
Could a case not be made that tying the banks to the state (or at the very least Anglo) is/was not in the common good and therefore the government overstepped it's limits?

meglome

feicim wrote: »

To be honest, if you are stupid enough to give a person who is stupid enough to shoot themselves in the foot with it - then I think its pretty clear you have to accept some of the responsibility.

Take all the so called "stupid" people who borrowed more money (for a house) than they can't now afford to pay back....

I'm not calling anyone stupid but I am saying they were adults and have to now take the consequences of their actions. Look I have sympathy for people who were lured into this however it's pretty basic stuff to not buy something you can't afford. It's very easy to blame the bankers and sure they had a good hand in it but as I've already said there's plenty of blame to go around. Unfortunately we had to save the banks (at least some of them), we can't afford to save individuals right now. It unfair but there you go.

We are going to have to do something for home-owners in the long run, whether that be some tax break or easing the bankruptcy laws etc. It doesn't help our economy if these people can't afford to spend.

@Laminations.
I'm not confusing collective and personal responsibility. I'm saying that people who foolishly overextended themselves need to take personal responsibility for that. People who consistently voted for corrupt and incompetent politicians need to take personal responsibility for that. And then collectively we as a nation need to look at how conducted our affairs, how we built a political and administrative system were no one needed to be responsible even when caught directly cheating and lying.

feicim

meglome wrote: »

I'm not calling anyone stupid but I am saying they were adults and have to now take the consequences of their actions. Look I have sympathy for people who were lured into this however it's pretty basic stuff to not buy something you can't afford. It's very easy to blame the bankers and sure they had a good hand in it but as I've already said there's plenty of blame to go around. Unfortunately we had to save the banks (at least some of them), we can't afford to save individuals right now. It unfair but there you go.

The banks are there to (supposedly) provide a service to the people.

The are not more important than the people to which they provide a service.

The government only needed to save one bank (to provide a service in Ireland). Instead they even created an extra bank (NAMA).

But the government was told to guarantee the irish banking debt and pay back all irish banking debt to protect German and French bankers interests and investments.

It may be pretty basic stuff not to buy stuff you can't afford. Its equally basic stuff that if you loan money to people who can't afford to pay it back you won't get your money back..

Unless of course the government saddles the debt onto every irish person (present and future). This act by Fianna Fail is inherently despicable and treasonous.

Why should the people of Ireland today and the future generations of Irish people be protecting the profits of german and french banks?

Literally millions of people who had nothing to do with this financial mess are facing a collective punishment at the behest of the EU.

Its a fine example of the government/EU dipping into the pockets of the 95% non-wealthy people in order to pass the money on to the top 5% of wealthiest people.

A heist on an epic scale.

Laminations

meglome wrote: »

@Laminations.
I'm not confusing collective and personal responsibility. I'm saying that people who foolishly overextended themselves need to take personal responsibility for that. People who consistently voted for corrupt and incompetent politicians need to take personal responsibility for that. And then collectively we as a nation need to look at how conducted our affairs, how we built a political and administrative system were no one needed to be responsible even when caught directly cheating and lying.

I've no problem with the collective part as you put it there, 'collectively we as a nation need to look at how conducted our affairs' etc. I've no problem having a national debate and reflection. But the collective responsibility that's happening is that 'people who foolishly overextended themselves' need to be paid for by people who didn't, paid for by everyone. That's not personal resonsibolity, it's the socialisation of private losses.

5% of mortgage owners are in difficulty, that means 95% are paying their way. Even bailing out the defaulting individuals (which I'm not suggesting is done) would maybe only cost a few billion, yet we've put billions into the banks, not to shore up mortgage defaults but to shore up developer defaults and flight of capital. There are circa 2000 individuals in NAMA, between them they've debts of over 100 billion. They overextended themselves, they should be obliged to pay and tough luck on them, the banks, and bondholders if they cannot. That's the risk in lending.

meglome

feicim wrote: »

The banks are there to (supposedly) provide a service to the people.

The are not more important than the people to which they provide a service.

The government only needed to save one bank (to provide a service in Ireland). Instead they even created an extra bank (NAMA).

But the government was told to guarantee the irish banking debt and pay back all irish banking debt to protect German and French bankers interests and investments.

It may be pretty basic stuff not to buy stuff you can't afford. Its equally basic stuff that if you loan money to people who can't afford to pay it back you won't get your money back..

Unless of course the government saddles the debt onto every irish person (present and future). This act by Fianna Fail is inherently despicable and treasonous.

Why should the people of Ireland today and the future generations of Irish people be protecting the profits of german and french banks?

Literally millions of people who had nothing to do with this financial mess are facing a collective punishment at the behest of the EU.

Its a fine example of the government/EU dipping into the pockets of the 95% non-wealthy people in order to pass the money on to the top 5% of wealthiest people.

A heist on an epic scale.

You post suggests that you think I agree with many of the decisions made by the last government, I don't. There's a difference between agreeing and accepting the reality of what's done is done.

"But the government was told to guarantee the irish banking debt and pay back all irish banking debt to protect German and French bankers interests and investments."

I would say though we didn't bail out the French and German banks. The figures I've seen in here just don't support that. The rants of course generally do. I also find it hard to believe the government was 'forced' to do anything, it's more likely they were helping their buddies in Anglo.

Laminations wrote: »

I've no problem with the collective part as you put it there, 'collectively we as a nation need to look at how conducted our affairs' etc. I've no problem having a national debate and reflection. But the collective responsibility that's happening is that 'people who foolishly overextended themselves' need to be paid for by people who didn't, paid for by everyone. That's not personal resonsibolity, it's the socialisation of private losses.

5% of mortgage owners are in difficulty, that means 95% are paying their way. Even bailing out the defaulting individuals (which I'm not suggesting is done) would maybe only cost a few billion, yet we've put billions into the banks, not to shore up mortgage defaults but to shore up developer defaults and flight of capital. There are circa 2000 individuals in NAMA, between them they've debts of over 100 billion. They overextended themselves, they should be obliged to pay and tough luck on them, the banks, and bondholders if they cannot. That's the risk in lending.

Again I'm not saying I agree with the previous governments decisions. I just don't know how to go back in time and change them. Once they gave that blanket guarantee and then saved Anglo our bed was made.

Though as I've said previously at least the banks and NAMA will be worth something, hopefully a decent something. The money we're throwing into the pit of overspending is gone forever.

Scofflaw

feicim wrote: »

The banks are there to (supposedly) provide a service to the people.

The are not more important than the people to which they provide a service.

The government only needed to save one bank (to provide a service in Ireland). Instead they even created an extra bank (NAMA).

But the government was told to guarantee the irish banking debt and pay back all irish banking debt to protect German and French bankers interests and investments.

It may be pretty basic stuff not to buy stuff you can't afford. Its equally basic stuff that if you loan money to people who can't afford to pay it back you won't get your money back..

Unless of course the government saddles the debt onto every irish person (present and future). This act by Fianna Fail is inherently despicable and treasonous.

Why should the people of Ireland today and the future generations of Irish people be protecting the profits of german and french banks?

Literally millions of people who had nothing to do with this financial mess are facing a collective punishment at the behest of the EU.

Its a fine example of the government/EU dipping into the pockets of the 95% non-wealthy people in order to pass the money on to the top 5% of wealthiest people.

A heist on an epic scale.

feicim, what will you do if I ask you to prove a central point of your rant there - that we're "bailing out French and German banks"? What figures can you provide to show that it's actually the case, contrary to what's shown by the Central Bank records and the recent stress tests? Or is it a case of "the dogs on the street"?

cordially,
Scofflaw

View

Laminations wrote: »

The government cannot claim their banking strategy has been socially just, so we move to 2°

My take on that is that, subject to respecting ownership rights, a property owner's rights can be regulated by the state in the interest of wider "social justice" so, for instance, the state can pass a law prohibiting you from polluting your land as it effects the wider community.

Laminations wrote: »

Could a case not be made that tying the banks to the state (or at the very least Anglo) is/was not in the common good and therefore the government overstepped it's limits?

A case could be made - whether the courts would accept it, is another question. The state has "in the common good" taken over land (compulsory purchase), companies (nationalisation) & bailed-out them out in the past (AIB in the 80's). Hence, there is precedent for the state engaging in such actions so I'd doubt the courts would rule such actions illegal.

In addition, I'd suspect that judges are not going to want to substitute their personal political opinions on what should be done/have been done about the banks for that of elected politicians. The answer to "What should be done with the banks?" is really up to the elected politicians and the electorate to decide upon.

Lefticus Loonaticus

Scofflaw wrote: »

feicim, what will you do if I ask you to prove a central point of your rant there - that we're "bailing out French and German banks"? What figures can you provide to show that it's actually the case, contrary to what's shown by the Central Bank records and the recent stress tests? Or is it a case of "the dogs on the street"?

cordially,
Scofflaw

"The Irish bubble would not have been possible without the inflow of vast amounts of capital, including the €88.4 billion that German banks were owed by Irish banks and companies at the end of last year."

From the same O'Toole article in first post. Yeah, ok, Fintan is just a dog on the street, but surely his opinion carries some weight.

I dont know if its entirely relevant to what you asked, but surely a good amount of our bank bailout fiasco was to do this particular 88 bill?

88 bill has a nice ring to it dosent it ? I wonder whos gonna pay that back? As far as I know it dosent even exist, but people keep pretending we have it somwhere .

View

Lefticus Loonaticus wrote: »

"The Irish bubble would not have been possible without the inflow of vast amounts of capital, including the €88.4 billion that German banks were owed by Irish banks and companies at the end of last year."

From the same O'Toole article in first post. Yeah, ok, Fintan is just a dog on the street, but surely his opinion carries some weight.

I dont know if its entirely relevant to what you asked, but surely a good amount of our bank bailout fiasco was to do this particular 88 bill?

88 bill has a nice ring to it dosent it ? I wonder whos gonna pay that back? As far as I know it dosent even exist, but people keep pretending we have it somwhere .

If VW AG sets up "VW Bank Ltd" - an IFSC company - and loans it 10 billion so it can conduct business world-wide on behalf of VW AG, we could have wonderful headlines about "Irish bank owes German company 10 billion" - factually correct, but completely misleading as the fact that the bank is a subsidiary of the German company is completely ignored (both in the headline and the official statistics).

Add, the fact the Irish tax-payer is bailing out Irish banks and we could no doubt make that headline "Irish tax-payer could owe German company 10 billion". Nothing misleading about that, is there? It does say could after all....

Lefticus Loonaticus

View wrote: »

If VW AG sets up "VW Bank Ltd" - an IFSC company - and loans it 10 billion so it can conduct business world-wide on behalf of VW AG, we could have wonderful headlines about "Irish bank owes German company 10 billion" - factually correct, but completely misleading as the fact that the bank is a subsidiary of the German company is completely ignored (both in the headline and the official statistics).

Add, the fact the Irish tax-payer is bailing out Irish banks and we could no doubt make that headline "Irish tax-payer could owe German company 10 billion". Nothing misleading about that, is there? It does say could after all....

Ah, yeah i see what you mean, but this demented game of musical chairs ended with the irish population having no chair and we didnt even know we were in any damn game to begin with. We just turned around one day and everyone else was seated. Then we were told we lost and we have to pay up.

They told that to Iceland aswell, but Iceland gave them the two fingers and sent em packing.

feicim

Scofflaw wrote: »

feicim, what will you do if I ask you to prove a central point of your rant there - that we're "bailing out French and German banks"? What figures can you provide to show that it's actually the case, contrary to what's shown by the Central Bank records and the recent stress tests? Or is it a case of "the dogs on the street"?

cordially,
Scofflaw

I am presuming that the recipients of the many billions the Irish taxpayer has pumped into Irish banks is being used to pay back other European banks. i.e. the ones the Irish banks borrowed the money to lend into the Irish economy and to Irish speculators.

Ultimately it is these european banks/bondholders that are receiving the "bailout" money... thus protecting their profits.

Am I wrong in this assumption?


http://www.independent.ie/business/european/german-exposure-to-our-banks-at-euro213bn-2594234.html

http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html

It seems to me that the Irish economy is only being kept on life support (via IMF/EU bailout) so that french/british/german banks will get their money back...

When I say bailing out - I don't mean to say that the money they are getting from Ireland is saving them - I meant they are protecting their profit sheets using the strong arm of the EU as their loan sharking enforcer.


PS: The title of the thread has "the rantings of mad-man" in it. Probably wise not to worry to much about modding this one:)

View

Lefticus Loonaticus wrote: »

Ah, yeah i see what you mean, but this demented game of musical chairs ended with the irish population having no chair and we didnt even know we were in any damn game to begin with. We just turned around one day and everyone else was seated. Then we were told we lost and we have to pay up.

The point was that a bank operating out of the IFSC - e.g. an Irish bank VW Bank Ltd or Deutsche Bank Ireland Ltd - would show up as having a liability to a German company/bank. That doesn't mean the Irish tax-payer is bailing it out nor does it mean that it needs bailing out at all.

And failing to distinguish between good/bad loans and loans we are liable for/ones we are not is a really fundamental error.

View

feicim wrote: »

I am presuming that the recipients of the many billions the Irish taxpayer has pumped into Irish banks is being used to pay back other European banks. i.e. the ones the Irish banks borrowed the money to lend into the Irish economy and to Irish speculators.

Ultimately it is these european banks/bondholders that are receiving the "bailout" money... thus protecting their profits.

Am I wrong in this assumption?


http://www.independent.ie/business/european/german-exposure-to-our-banks-at-euro213bn-2594234.html

http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html

It seems to me that the Irish economy is only being kept on life support (via IMF/EU bailout) so that french/british/german banks will get their money back...

When I say bailing out - I don't mean to say that the money they are getting from Ireland is saving them - I meant they are protecting their profit sheets using the strong arm of the EU as their loan sharking enforcer.


PS: The title of the thread has "the rantings of mad-man" in it. Probably wise not to worry to much about modding this one:)

The (domestic) banks raised money on the international bond markets. Anyone, anywhere could be the holders of those bonds. There is no reason to assume, as many of our media commentators have, that the our banks by-passed investors from the two largest bond markets in the world - the US and London - and only sold their bonds to German and French banks. In fact, it is strange why anyone would assume that to be the case.

Indeed, if we make the assumption - and I stress it is an assumption - that Irish pension managers might have been tempted to buy bonds in the Irish banks, given that they knew them well/were borrowing from them (in a personal capacity) to buy that extra investment property, "burning the bondholders" might prove to be a really spectacular own goal.

Scofflaw

Cross-post from another thread, because it's far too long to type out again!

Media Figures on foreign bank 'exposures' to Ireland

First, let's deal with the figures cited in the media for 'exposures' to Ireland - these are usually wrong, because they're based largely on the Basel Bank of International Settlements figures.

The problem with using their figures is that they record all money owed by banks/financial institutions in Ireland to banks/financial institutions outside Ireland. So, if Deutschebank has a subsidiary here - and they do - then the holdings of Deutsche Bank AG here are recorded as 'owed' to their German parent.

That would be relevant to Ireland if and only if Deutsche Bank AG here had any dealings with the Irish banks or the Irish economy, but they don't. They're a German bank doing business largely with Germany - Ireland is simply a handy offshore hub with low taxes. So describing that money as 'German exposure to Ireland' is entirely wrong.

The Basel figures cover a total of 83 banks/financial institutions based in Ireland. The "domestic" Irish banking sector - that is, those banks/financial institutions which do significant business with the Irish economy - only comprise 19 of those. And the banks we've bailed out number only 6.

So the Basel figures are a gross over-estimate, and result in a very distorted view of exposure to Ireland. Journalists used them initially because they were the only figures that gave a country breakdown, and then uncritically copied each other's use of them, so now they're kind of hard of dislodge.

Other sources for foreign (esp eurozone) exposures to ireland

What other sources are available? Well, the Central Bank provides aggregate balance sheets for three groups of banks/financial institutions - all resident in Ireland, the domestic banks, and the 'covered banks' (ie the bailed out banks). The first group is basically equivalent to the Basel group - there's a couple of differences.

Within those aggregate balance sheets are recorded the securities held by three geographic groups of bondholders - Irish, eurozone, and rest of world. In the covered banks, the eurozone bond holdings never top €16.2bn, eurozone deposits €27bn. Domestic banks, little bit higher - €17.8bn securities, €44bn deposits. All Irish-resident banks, €50.2bn securities, €253bn deposits.

So, yes, there was a wave of eurozone money flowing through banks in Ireland - but it flowed right through Ireland, because it flowed through eurozone bank subsidiaries in the IFSC straight back out into the eurozone.

Now, it's been said that maybe the 'rest of world' and 'Ireland' figures really includes eurozone banks who are buying bonds through intermediaries. That's possible, but nobody who suggested it has ever shown it happening, and it's equally applicable the other way round. It's also a rather obvious attempt to fit the data back onto the preferred picture, which still has no actual evidence for it.

Luckily, the most recent round of stress tests included a picture of bank exposures by country and type for all the banks that took part (available here), which gives us a snapshot of the bank exposures for all the major eurozone banks - and guess what? Their bank exposures add up to €16 billion, the same kind of figure as the Central Bank figures show for eurozone banks (in detail, that's €11.2bn German banks, €2.9 France, €1.2bn Portugal, and loose change for the rest).

So we have two sources of data - what the Central Bank of Ireland records as liabilities to the eurozone, and what eurozone banks record as exposure to Ireland. And they agree pretty closely, and they both say the same thing, that there isn't a huge exposure to Irish banks in the eurozone banks. In the case of the CBI figures, which go back to 2003, they also say that there never has been.

As far as I can see, the Irish banks largely operated through the money markets in New York and London. That makes sense, because that's where their subsidiaries are, and where their historical connections are too - that's why you'll find AIB benefiting from the US Federal bailouts in 2009 (article here, but note that AIB didn't get anything like the $27bn the journo claims, because he has added up a series of rolling loans).

TL;DR: our banks are closer to Boston than Berlin.

Are we bailing out French and German banks, or have we already done so?

Obviously, if there hasn't ever been much eurozone money in the Irish domestic banks - the ones that actually lend into Ireland - then the claim that we're paying back eurozone banks makes very little sense. Not only that, but of the investors in Irish banks, the eurozone bondholders are those whose bondholding has shrunk by least - eurozone bond holdings in Irish covered banks are now at 66% of their pre-Guarantee level, whereas 'rest of world' holdings are at 23%. In absolute terms, the gap is even larger - eurozone bond holdings in Irish domestic banks are now down by only €4.9bn on their pre-Guarantee level, from €14.3bn to €9.45bn, whereas 'rest of world' holdings are down €56bn from €72.8bn to €16.8bn. So the eurozone bondholders haven't been paid off anything very much, whereas the 'rest of world' (largely UK/US) bondholders have cashed out, taken the money and run.

People are welcome to check the figures I'm using - the sources are all cited and available.

cordially,
Scofflaw