Category: Comment

There are days when you just want to give up.

Madam, – Are Irish politicians and the Irish media living in cloud-cuckoo-land that they would damage our image further for the sake of headlines or political point-scoring?

Brian Cowen was, of course, wrong to agree to an interview he was not ready for. It was an error of judgment, but to deliberately turn it into a world news event while the eyes of the world are focused on us and the state of our economy is a far greater error of judgment. – Yours, etc,

RICHARD McNAMARA,

Castleknock, Dublin 15.

“Shhhh… If we all stay quiet about that interview heard by 600,000 people we’ll be grand. Someone turn off the interwebs there, don’t let word get off-shore. Pretend to be asleep, all of ye! And keep those journalists off the airwaves, for jaysis’sake!”

Of course, it’s Simon Coveneny and the hacks’ fault that France 24 is broadcasting stuff like the report below (WARNING: contains moments of waffling estate agent and Alan Dukes) to an international viewership.

Or was that recorded pre-Morning Ireland? Indeed it was…

Click these here words to pass through the intertubes and find your way to the latest analysis of the Irish economic situation by the above named individuals. The pair had other posts on the same topic here, (May) and here (September). They seem to have a more rounded understanding of the Irish situation than many other international commentators.

But markets today think there is a 50% chance that Greece will default within the next five years – and a 25% chance that Ireland will do so. The reason is simple: both Greece and Ireland are likely insolvent.

While the Greek fiscal fiasco is now common knowledge, Ireland’s problems are deeper and less widely understood. In a nutshell: Ireland’s policymakers failed to supervise their banks, and watched (or cheered) from the sidelines as a debt-fueled spending binge generated the “Celtic miracle,” whereby Ireland grew faster than all other EU members and Dublin real estate became some of the most expensive in the world.

[…] To halt this downward spiral, Ireland’s risk of insolvency needs to be put to rest. Either banks need to default on their senior obligations, or the government will need to default alongside the banks.

For those who don’t know, Johnson is ex-Chief Economist at the IMF, Boone is Chairman of Effective Intervention at the London School of Economics’ Center for Economic Performance. The recently published a book on the crash called ‘13 Bankers‘ and they run the widely-read blog Baseline Scenario.

There be a smart man.

Gerard Cunningham.

Especially on the Noel Whelan footnote.

I’ve started re-examining the documents released by the Department of Finance in advance of the banking inquiry (remember that?). There are lots of interesting bits, and I will return to many of them. But here is one and it relates to the current events around breaking up Anglo – and the ideas of selling off deposit books mooted some time ago by some economists.

In September 2008, the Government was considering selling the deposit book of Irish Nationwide. Direct link here. In that month, there were four options listed:

1. Do nothing.
2. Ensure an orderly run-off of INBS
3. Break-up of INBS
4. Merge INBS with another institution.

None of these appear to have been acted on, but instead the entire building society, deposits and creditors, was guaranteed.

Merrill Lynch clearly advised that only senior creditors and depositors might be guaranteed, but this action would have clear dangers for sovereign credit ratings. Here is the passage.

Here is part one of the released DoF documents. I’ve marked each document using DocumentCloud. I hope to move away from using Scribd. To view the notes on the document you have to expand it to full screen using the button on the bottom left, or click the notes tab on the top.

At the opening of the €713m Convention Centre, NAMA/REO/Treasury developer Johnny Ronan and former Taoiseach Bertie Ahern.

Like peas in a pod.

[Via Duisigh]

Here.

Here is what is happening our bond spreads today: