Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?

I can't agree ibis. Economic policies and regulation have an effect.

To excuse those in control of economic policy and regulation,

to excuse the experts who are paid to guard against such risks be they experts in Ireland, Europe or in the USA,

to excuse those who created incomprehensible debt packages with hidden stinkers,

to excuse those who gave such packages good credit ratings while being paid by the people they are rating,

to excuse those in banks who awarded bonuses based purely on the volume of lending rather than the quality of the loan,

to excuse the chief executives who took huge bonuses on yearly profits while jeopardising their companies future by lending recklessly and buying debt which they did not understand,

to excuse the industry lobby groups, and particularly the financial industry, who campaigned behind closed doors for the allowance of derivatives trading and the fuelling of the credit bubble

to excuse the bankers, who sell themselves to customers on their trust-worthiness, who allowed young people starting out in their life, with little experience of financial matters, to take out crippling loans for property, holidays, hairdos, cars and credit cards expenditure (usually increased without one's approval)

to ignore all those wrongs by the well remunerated people who are paid to manage these things and who accepted the fiduciary duties and obligations which were entrusted to them and then

to blame the individuals who had their own jobs to do and who could not be expected to understand derivatives, complex debt obligations, ratings, the changes in what was being traded in Frankfurt and the repeal of the Glass-Steagal Act (or whatever it is called), the individuals who even if they were prudent are still probably under a big debt obligation or who even if they bought nothing are now losing their jobs and probably having to leave the country

to say all that is like something you'd hear from an estate agent in a Ross O'Carroll Kelly book .

You're squaring up for Post of October there Zhou - brought a tear to my eye.

I think it's worse than unfair to blame people and consumers of these credit giveaways "hey it's Siobhán in AIB, do you want another 500 euro on your overdraft?" I got as I was walking home past a pub/Abrakebabra in Dublin once, at the end of the month half broke

I think it's a miracle that people didn't go bananas althogether on credit ... people could have gone mental altogether and half did but it really could have been worse.

Seriously, some people were cornered and snookered with their credit situations and as I said earlier with their level of job - good hard workers who'll not be thanked for being behind this when the party finishes up were not earning enough to buy yet were crippled with rental payments because the Dublin market is not or was not one of great choice or variety. Is that the same all over the planet? Imagine earning 3k+ a month and having to lash out half of that because you don't want to share a flat? Plus you've car repayments to meet .. feck that.

The rental market could have been more sophisticated or varied with more choice but I don't think there were any government efforts on that? Maybe there were - I got fed up and left Dublin after 5 years, it was a real pain there. People who worked there crammed into one and two bed apartments in excessive numbers for short periods then fecked off when the money was made. There was terrible imbalance and one of the things I blame is the barring of high-rise buildings.

I'm scarred for life I tells ya.

Wasn't sure of the thread to put this under, but this'll do. If you want a take on the crisis from an old timer go to:

http://www.pbs.org/nbr/info/video.html

Go to the "Nightly Biz Report - Tonight on NBR" if your interested in hearing about John Gutfreund's (ex-CEO of Solomon Bros - ) take on the crisis, Congress, what needs to be done and what he's telling his clients to do.

If you start from 16:30 minutes or so, you'll get his take on things.

He's an old-timer who, despite having run of the US's oldest Investment banks, identifies the core problem in banking today, imo.

I especially liked it when he called the Congress Rep monkies. Gwan ya boyo ya.
gl

rockyracoon wrote:

Wasn't sure of the thread to put this under, but this'll do. If you want a take on the crisis from an old timer go to:

http://www.pbs.org/nbr/info/video.html

Go to the "Nightly Biz Report - Tonight on NBR" if your interested in hearing about John Gutfreund's (ex-CEO of Solomon Bros - ) take on the crisis, Congress, what needs to be done and what he's telling his clients to do.

If you start from 16:30 minutes or so, you'll get his take on things.

He's an old-timer who, despite having run of the US's oldest Investment banks, identifies the core problem in banking today, imo.

I especially liked it when he called the Congress Rep monkies. Gwan ya boyo ya.
gl

His advice was to "keep liquid". I'll have to put the cat on e-bay.

cactus flower wrote:

His advice was to "keep liquid". I'll have to put the cat on e-bay.

Better be one of them pure bred yokes I reckon.

What struck me, as well the 'liquid' sentiment, was that bankers should treat depositor's or investor's money as if it was their own. Fiduciary responsiblity and the moral imperative summed up in one sentence. Instead, the bankers allied with our governors are treating our money and our taxes as if it were monopoly paper. A curse on their houses!

I also like the comment about bankers worrying that the other fellas/lassies were getting rich. Something along the lines: "if you were smart enough you'd be rich already." Nice.

Gordon Gekko sweeps aside the old guard - we can't say we weren't warned...




"Corporate America seems to be 'survival of the unfittest'"

We need more of this...

Take not of Dermot Desmond at about 2 minutes in

ibis wrote:

Pax wrote:

ibis wrote:

Auditor #9 wrote:

Hard to believe it's all Fianna Fáils fault

Man, how the feck did we get so up ourselves?

It's only FF's fault in that they didn't stop us - and, heck, we wouldn't have voted them in again if they had. Nobody made us act like we were the Beveley Hillbillies.

Ibis, that's almost like saying slavery societies went on for centuries, so lets blame the slaves shall we?

Not even slightly. Slaves had no choice but to be slaves. We have the choice to (a) hold our politicians to account, and (b) to act sensibly. It's not much to ask.

Pax wrote:

The rate of change is much quicker today, but you ignore the institutional effects of all manner of institutions and markets and media etc on the peoples' preferences and views, in that statement.

You're hardly claiming that we are the helpless pawns of said influences. Well, perhaps you are, because it is necessary for any utopian to believe that.

Of course I'm not claiming that we are the helpless pawns of said influences. However you've excluded institutional effects in your post, and have done so subsequently, --which is par for the course. It's understandable perhaps because once you cave in here, it leads to unpleasant pastures.

So none of this should be grades of value terms like 'utopian' or 'left' or 'right' for instance, -- it's just observable reality. The observable reality of a market economy.

I don't understand why you'd need to be a utopian (I'm not) to see the reality of, say, endogenous preferences ( http://en.wikipedia.org/wiki/Endogenous_preferences ), or of the effects of markets, the media and indeed the interplay between the latter two, say?

And speaking of media, the very same financial talking heads associated with the boom seem to be the most prevalent in discussions on possible solutions. Meanwhile our acceptably bold 'rebels' are well ensconced ideologically with them --the Eddie Hobbs, the Shane Rosses, etc All are part of the mainstream lack of spectrum.



I really don't for a second believe you fail to understand my slavery analogy.

Speaking of slaves, many advocates of slavery suggested that slaves should have a choice of masters as it was observable that they had a better living standard during the years of slavery. It could only be furthered if they could choose their masters in a market and sure, wasn't it was more economically beneficial to have slavery than to not have slavery. One could almost imagine the slave agreeing to it....

(the enlightening film Manderlay comes to mind http://www.imdb.com/title/tt0342735/
https://www.youtube.com/watch?v=FH0q5xcigtw )

Pax wrote:

ibis wrote:

Pax wrote:

ibis wrote:

Auditor #9 wrote:

Hard to believe it's all Fianna Fáils fault

Man, how the feck did we get so up ourselves?

It's only FF's fault in that they didn't stop us - and, heck, we wouldn't have voted them in again if they had. Nobody made us act like we were the Beveley Hillbillies.

Ibis, that's almost like saying slavery societies went on for centuries, so lets blame the slaves shall we?

Not even slightly. Slaves had no choice but to be slaves. We have the choice to (a) hold our politicians to account, and (b) to act sensibly. It's not much to ask.

Pax wrote:

The rate of change is much quicker today, but you ignore the institutional effects of all manner of institutions and markets and media etc on the peoples' preferences and views, in that statement.

You're hardly claiming that we are the helpless pawns of said influences. Well, perhaps you are, because it is necessary for any utopian to believe that.

Of course I'm not claiming that we are the helpless pawns of said influences. However you've excluded institutional effects in your post, and have done so subsequently, --which is par for the course. It's understandable perhaps because once you cave in here, it leads to unpleasant pastures.

Does it? Fair enough - lead on, then MacDuff. I fully accept that institutions influence the average person - after all, why would they spend their money on advertising if it didn't work? Do I - further - accept that those institutions bear a moral responsibility for attempting to influence people to those people's eventual detriment? Sure - of course I do.

Pax wrote:

So none of this should be grades of value terms like 'utopian' or 'left' or 'right' for instance, -- it's just observable reality. The observable reality of a market economy.

Which is a bit like Christian saying "Satan is just observable reality". You observe a bad thing is happening, and you assume that said bad thing is a necessary outcome of a market economy - because you believe that a market economy is a bad thing. As the seed, so the tree - but it's still simply a statement of your belief.

Pax wrote:

I don't understand why you'd need to be a utopian (I'm not) to see the reality of, say, endogenous preferences ( http://en.wikipedia.org/wiki/Endogenous_preferences ), or of the effects of markets, the media and indeed the interplay between the latter two, say?

You'd need to be a utopian to assume that bad things happen only because the mass of people are misled by a minority - because utopia requires that the majority are perfectible after the minority are eliminated.

Pax wrote:

And speaking of media, the very same financial talking heads associated with the boom seem to be the most prevalent in discussions on possible solutions. Meanwhile our acceptably bold 'rebels' are well ensconced ideologically with them --the Eddie Hobbs, the Shane Rosses, etc All are part of the mainstream lack of spectrum.

Well, sure. Mainstream commentators follow whatever the mainstream is currently saying, and try to look wise while doing so. That's what makes them commentators. Nobody expect sports pundits to win races.

Pax wrote:

I really don't for a second believe you fail to understand my slavery analogy.

I'm honestly not certain I do understand it. People are not slaves, are they? If you're saying they are, I disagree. If you're not saying they are, then what exactly is your analogy?

We are not slaves in Ireland or the West, far from it.

Yet, we are not even pawns in the geo-political and geo-economic game that it being played in our names these days. We are literally the board upon which the so-called experts play their games of chess, if you like.

A pawn, however small its chances, has the ability to survive and even come back as a more powerful chess piece in some games. For the countless millions who toil each day to keep themselves and their families alive, the bigger game is just out of reach. It seems between individual regulation, the rise of multi-nationals and the necessity to incur high levels of debt in order to maintain "the lifestyle" we are presented with leave us with ever fewer options to advance ourselves. The rules we are setting for those not even born will mean that they have no shot, or a very small shot, of making it onto the playing board.

The idea that we can alter the course of events by voting every four or five years is not cutting the mustard any longer, and as our society fragments into ever smaller interest-based sub-sections, the solutions to the problems seen further away day-by-day.

The issues are complex, the alternatives such as socialism haven't worked, and even analogies wear thin given the complexity. However, the road we've taken in Ireland has just proven its own weaknesses, and as the powers-that-be scramble to cover their asses, they merely seek to back-fill huge pot-holes while doing nothing to alter the course we're taking.

ibis wrote:

Pax wrote:

ibis wrote:

Pax wrote:

ibis wrote:

Auditor #9 wrote:

Hard to believe it's all Fianna Fáils fault

Man, how the feck did we get so up ourselves?

It's only FF's fault in that they didn't stop us - and, heck, we wouldn't have voted them in again if they had. Nobody made us act like we were the Beveley Hillbillies.

Ibis, that's almost like saying slavery societies went on for centuries, so lets blame the slaves shall we?

Not even slightly. Slaves had no choice but to be slaves. We have the choice to (a) hold our politicians to account, and (b) to act sensibly. It's not much to ask.

Pax wrote:

The rate of change is much quicker today, but you ignore the institutional effects of all manner of institutions and markets and media etc on the peoples' preferences and views, in that statement.

You're hardly claiming that we are the helpless pawns of said influences. Well, perhaps you are, because it is necessary for any utopian to believe that.

Of course I'm not claiming that we are the helpless pawns of said influences. However you've excluded institutional effects in your post, and have done so subsequently, --which is par for the course. It's understandable perhaps because once you cave in here, it leads to unpleasant pastures.

Does it? Fair enough - lead on, then MacDuff. I fully accept that institutions influence the average person - after all, why would they spend their money on advertising if it didn't work? Do I - further - accept that those institutions bear a moral responsibility for attempting to influence people to those people's eventual detriment? Sure - of course I do.

We are in agreement that different institutions and environments influence the average person in a multitude of differing ways. So why focus on blaming the average person? To what extent are they free to choose if the 'right' option is to go against the grain?

How could we change that situation without engaging in a process of replacing those very same institutions and mechanisms? Or/and should we just try and continue ameliorating them? Then again we could always take the 'low road', and support their growth and use in the allocation, production, consumption of practically every single resource on the planet?
So perhaps, this is your view, that we've stumbled upon the best there is in these institutions, we should just look no further and just blame the average person? The 'power of one' campaign is enough!

ibis wrote:

Pax wrote:

So none of this should be grades of value terms like 'utopian' or 'left' or 'right' for instance, -- it's just observable reality. The observable reality of a market economy.

Which is a bit like Christian saying "Satan is just observable reality". You observe a bad thing is happening, and you assume that said bad thing is a necessary outcome of a market economy - because you believe that a market economy is a bad thing. As the seed, so the tree - but it's still simply a statement of your belief.

This is just a ridiculous comparison. Are you trying to say there's no real world evidence of the effects of markets? Even mainstream economists accept that there is. Now maybe I'm picking up the wrong end of the stick but you seem to have contradicted yourself with your statement above about advertising.
If there's any faith based comparison to be made its with the faith market adherents have in it to solve everything from the environment to the delivery of healthcare, the current economic collapse etc.

But lets close in on the media. If you read a market analysis of, say, the car industry then would you take it as a faith based analysis? So why wouldn't you do the same when you look at the media?
Chomsky and Herman's filtering process is enlightening in this regard.
check out the article below.

INTELLECTUAL CLEANSING: PART 1 Keeping The Media Safe For Big Business

Quote :

...In 1996, Noam Chomsky attempted to explain to an equally bemused Andrew Marr (then of the Independent):

Marr: "This is what I don't get, because it suggests - I mean, I'm a journalist - people like me are 'self-censoring'..."

Chomsky: "No - not self-censoring. There's a filtering system that starts in kindergarten and goes all the way through and - it doesn't work a hundred percent, but it's pretty effective - it selects for obedience and subordination, and especially..."

Marr: "So, stroppy people won't make it to positions of influence..."

Chomsky: "There'll be 'behaviour problems' or... if you read applications to a graduate school, you see that people will tell you 'he doesn't get along too well with his colleagues' - you know how to interpret those things."

Chomsky's key point:

"I'm sure you believe everything you're saying. But what I'm saying is, if you believed something different you wouldn't be sitting where you're sitting." (The Big Idea, BBC2, February 14, 1996; http://www.aithne.net/index. php?e=news&id=4&lang=0 )...

(the video of Marr's Chomksy interview is on youtube)

ibis wrote:

Pax wrote:

I don't understand why you'd need to be a utopian (I'm not) to see the reality of, say, endogenous preferences ( http://en.wikipedia.org/wiki/Endogenous_preferences ), or of the effects of markets, the media and indeed the interplay between the latter two, say?

You'd need to be a utopian to assume that bad things happen only because the mass of people are misled by a minority - because utopia requires that the majority are perfectible after the minority are eliminated.

That's a misrepresentation. People are not perfectible, but to the extent that people's views and preferences are endogenous then current institutions and economic processes bias them in one direction. That includes those within the two classes of the minority of which you speak. The current market failure is just one example of that biasing process. In other words I don't believe the story of human emancipation is over, and to suggest it is, well, that's faith based!

ibis wrote:

Pax wrote:

And speaking of media, the very same financial talking heads associated with the boom seem to be the most prevalent in discussions on possible solutions. Meanwhile our acceptably bold 'rebels' are well ensconced ideologically with them --the Eddie Hobbs, the Shane Rosses, etc All are part of the mainstream lack of spectrum.

Well, sure. Mainstream commentators follow whatever the mainstream is currently saying, and try to look wise while doing so. That's what makes them commentators. Nobody expect sports pundits to win races.

'Mainstream', hmm I'm not too sure about that.....as Chomsky said above,

"I'm sure you believe everything you're saying. But what I'm saying is, if you believed something different you wouldn't be sitting where you're sitting."

So see the link above on the filtering process within the media in a democratic society and the evidence of what people actually want to see/read/hear in their media.

ibis wrote:

Pax wrote:

I really don't for a second believe you fail to understand my slavery analogy.

I'm honestly not certain I do understand it. People are not slaves, are they? If you're saying they are, I disagree. If you're not saying they are, then what exactly is your analogy?

Manderlay makes the point for me.*



--------------
*(spoiler-alert) At the end of the film the slaves choose to become slaves again rather than to be free to govern themselves. Should we blame the slave? Or should we blame the institution of slavery for the terrible effect on those people?

rockyracoon wrote:

We are not slaves in Ireland or the West, far from it.

Yet, we are not even pawns in the geo-political and geo-economic game that it being played in our names these days. We are literally the board upon which the so-called experts play their games of chess, if you like.

A pawn, however small its chances, has the ability to survive and even come back as a more powerful chess piece in some games. For the countless millions who toil each day to keep themselves and their families alive, the bigger game is just out of reach. It seems between individual regulation, the rise of multi-nationals and the necessity to incur high levels of debt in order to maintain "the lifestyle" we are presented with leave us with ever fewer options to advance ourselves. The rules we are setting for those not even born will mean that they have no shot, or a very small shot, of making it onto the playing board.

The idea that we can alter the course of events by voting every four or five years is not cutting the mustard any longer, and as our society fragments into ever smaller interest-based sub-sections, the solutions to the problems seen further away day-by-day.

The issues are complex, the alternatives such as socialism haven't worked, and even analogies wear thin given the complexity. However, the road we've taken in Ireland has just proven its own weaknesses, and as the powers-that-be scramble to cover their asses, they merely seek to back-fill huge pot-holes while doing nothing to alter the course we're taking.

After the years of tents and plate dinners, there is an obscene logic in FF (with the nod from FG) coming good for their masters and handing us and our children over to them lock, stock and barrel to become slaves to the banks' debts.

An election would not be enough. There should be changes to the Constitution to prevent this going ahead.

You are assuming a major bank collapse, cactus. Say this doesn't happen in the next two years but that this is dealt with by the banks being taken over and having large write downs. It is quite possible it will cost us little.

johnfás wrote:

You are assuming a major bank collapse, cactus. Say this doesn't happen in the next two years but that this is dealt with by the banks being taken over and having large write downs. It is quite possible it will cost us little.

I started another thread on the wider impacts of the bail out and the EU aspect, as this thread is a good one for more focused reaction to how Ireland is feeling and is affected.

It wouldn't be a bank collapse now johnfas as we have taken on the liability ourselves. If you have a look at California you can see the possibilities.
Where would we find 20 billion euro in a hurry? At best we'd have to borrow at bad rates.

Here's a really superb article and analysis from the Irish media monitoring site, mediabite, on the Irish media before and after the boom. (might even be worth a thread on the media aspect of all this?)

The Media and the Banking Bailout

an interesting paragraph from Fintan O'Toole and those talking heads.

Quote :

The Irish Times' Assistant Editor Fintan O'Toole commented in interview with MediaBite on this issue:

"RTE are one of the few media outlets that don't take property advertising. It's not a simple one plus one equation, though it is undoubtedly true that if not the choice of subject, but the prominence that is given a certain subject has to be related to the direct interests of the media outlets themselves. There is no question that almost all of the Irish media for the last 10-15 years has had a crucial economic stake in a rising property market. Because property advertising is very lucrative and is a very important part of what makes the Irish media tick. It's not that a newspaper like the Irish Times will not publish things that say 'this is a bubble'. It has published a number of pieces and very authoritative pieces, but in a sense it's where are those pieces going to appear. How are they related to the broader agenda, in terms of how we understand our society at the moment? So I'm not saying there is an absolute mechanical relationship between certain interests and what appears, but I am saying that the relationship exists. People need to understand this, it is not a council of despair - well you know there is nothing you can do about this. A critical understanding of how the media works is one in which people understand the kind of relationships that are involved and how to read and see that it is not necessarily an objective and accurate reflection of everything that is important to Irish society." [13]

Unfortunately even tempered admissions such as this on the direct interests of the media in the buoyancy of the property market are rarely hinted at in print.

Discussing the Market - A 'procession of the powerful'

A recent analysis by Greg Philo of the Glasgow University Media Group titled 'More News, Less Views' rejected by the Guardian on the grounds that "it would be read as a piece of old lefty whingeing about bias" commented: [14]

"News is a procession of the powerful. Watch it on TV, listen to the Today programme and marvel at the orthodoxy of views and the lack of critical voices. When the credit crunch hit, we were given a succession of bankers, stockbrokers and even hedge-fund managers to explain and say what should be done. But these were the people who had caused the problem, thinking nothing of taking £20 billion a year in city bonuses. The solution these free market wizards agreed to, was that tax payers should stump up £50 billion (and rising) to fill up the black holes in the banking system. Where were the critical voices to say it would be a better idea to take the bonuses back?" [15]

As with the property crash, the property boom was also a procession of the powerful. Mainstream media debates were invariably dominated by those with financial vested interests. For example, when the government was considering changes to stamp duty in order to artificially bolster property prices in late 2007 the Irish Business Post "asked six experts for their views on whether now is the time for the government to reform the tax". [Stamp duty: the debate rages on][16] The response was overwhelmingly in favour of what should now be considered a failed policy. Those experts were:

Chief Economist with Friends First
President of the Irish Auctioneers and Valuers Institute
Economic research officer at the Economic and Social Research Institute
Economist with Douglas Newman Good
Chief Economist at the Sherry FitzGerald Group
Lecturer in economics at the Cairnes School of Business and Public Policy at NUI Galway

In November last year, when the Irish Times canvassed the views of property experts, or as they are more casually known property dealers, developers and investors, "to find out what they expect will happen over the next 12 months." They consulted:

Managing director, CBRE
Investments director, Lisney
Managing director, Savills HOK
Managing director, Sherry FitzGerald
Managing director, Ballymore
Chief executive, IPUT
Director, Finnegan Menton

Predictably, these 'experts' were unanimously upbeat about the future of the property market. [Focus on prime locations and bargains, The Irish Times, 28/11/2007][17]

In May 2006 - The owners of Gunne Estate Agents sold to private investors
In June 2006 - The owners of Hamilton Osborne King sold to Savills, a major UK estate agent.
In June 2006 - The owners of Colliers Jackson-Stops sold a controlling stake to Colliers CRE, a major UK estate agent.

In June 2005 - AIB Bank sold their headquarters in Ballsbridge for 160 million.
In June 2006 - Bank of Ireland sold their headquarters for 200 million.

----

Do as I do, not as I say.

The Post Office took deposits of €50 million into their savings accounts last week. This was one of their largest intakes for "quite a long time" according to the person I was talkint to this morning.

Speaking of fun and games beginning and Freedom of Speech:

http://www.thepropertypin.com/viewtopic.php?f=19&t=14134

baby_tooth wrote:

something massive is afoot right now in the regulators as we speak, or shoul i say as i type.....

expect big news before monday morning re a huge bank and the irish system....


heads up and all that....can't say names obviously...but its getting worse...

baby_tooth wrote:

its in talks with FED, ECB and irish regulator as we speak....and if it goes down, it will have major ripples in the western world market....the biggest bank failure in history may be coming.....and i distingusih bank over investment bank....

its not definite but if something major doesn't happen before monday morning, then its good nite rosanne....

i cant say names as u can imagine...just expect news within 24 hours....

Loved this:

ibis wrote:

Loved this:

I hope that's not Mulligan's!!!

This is being reported on CNN. It appears most likely the German mortage bank which is a property lender and that might one supposes be calling in loans?

It seems probable that we should nationalise the two main banks and all their assets and prepare to pay up however we can. An EU one-off wealth tax on higher end capital gains over the last five years would be a start.

Germany has stepped in to guarantee all private savings. This will dampen their criticism of Ireland.

http://news.bbc.co.uk/2/hi/business/7653317.stm

johnfás wrote:

Germany has stepped in to guarantee all private savings. This will dampen their criticism of Ireland.

http://news.bbc.co.uk/2/hi/business/7653317.stm

Where Cowen leads, Merkel follows

From the reporting so far it appears that it is not on the same terms in that it is, on the face of it, only a guarantee of private deposits rather than a complete underwriting of debt. However, it is certainly nearer Dublin than they were suggesting they would go.

johnfás wrote:

Germany has stepped in to guarantee all private savings. This will dampen their criticism of Ireland.

http://news.bbc.co.uk/2/hi/business/7653317.stm

May also hamper the effectiveness of our moves.