First, let's hang all the stockbrokers

The point of this piece is talk about the way the media is provding an outrageously soft landing for the bankers, stockbrokers and developers. I know it embodies a certain amount of overlap with other threads on the bailout but hopefully people will see some merit in focusing on what the media is doing as a separate issue which is the final and central point of what I've written below. Anegus Fanning's Sunday Independent is ever more outrageous in its propagandising on behalf of Fianna Fail and big business interests.

With apologies to William Shakespeare but, first, let’s hang all the stockbrokers.

How much more insult can the Irish electorate withstand from this government? At a time when there are harsh lessons to be faced about economic management, the government’s solution is, in effect, to take the very lunacy which got us into this mess in the first place to even more bizarre extremes: unlimited funding for the wheelers and dealers who have so clearly demonstrated just how irresponsible and false their theories of economic management truly are. The Irish government’s insanely irresponsible attempt to get ahead of other EU countries in the midst of this crisis will boomerang with even more disastrous consequences as other countries attempt to emulate this brazen gesture in a global market context which cannot sustain this sort of economic behaviour any longer. Are we seriously going to allow the government to waste even more public money like this? The abject failure of the ‘free’ market must be apparent to anyone with an ounce of common sense. Sure enough, the banking sector is getting off Scott-free with the folly of bankrolling the outrageous behaviour of property developers, financiers and the like – just a handful of whom together account for the bulk of the indebtedness that has brought the country to its knees. It's no use looking to 'abroad' for the solution. What is truly shocking to realise is the relatively tiny number of such people who have brought the entire world to economic disaster. How dare the private sector ever again presume to lecture the public sector about economic management. Capitalism and the free markets are in disgrace, their hollow, selfish creed exposed for all to see. The equitable distribution of the world’s resources for the benefit of all humankind must now surely be our collective priority.

It’s those who are least culpable if not entirely blameless who will, naturally, be paying for economic policies which never amounted to more than a jam today greed fest. How clever does the SSIA scheme now look, to take just one example? How did the so-called ‘investors’ in that profligate electoral bribe ever imagine that it was going to be paid for? Out of the personal bank accounts of government ministers? As the inevitable collapse of the global financial markets was staring the business buccaneers and their political gophers in the face, our government was throwing away public money intended for schools, hospitals, services for those with disability and so forth - all for a scheme which did nothing for the collective economic good but was spent in many instances instead on the purchase of essentials such as expensive cars, holidays abroad and boob jobs for people with more money than sense. Even for those who have saved the spoils of the bribe, the benefit is illusory because there never was, never will be, such a thing as a free lunch. When you find yourself on a hospital trolley for three nights awaiting urgent treatment, ask yourself if your SSIA was really worth it. In any event you’ll be giving the whole lot back again with interest one way or another – as was always the intention.

But the lunacy continues apace. Right now, the government is subsidising tax breaks and other concessions for foreign raiders (a more appropriate word for investors, in truth) who are poised to exploit the extreme right-wing ideology of Minister for Health, Mary Harney and her husband Brian Goeghegan, Chairman of management consultants MRPA Kinman. MRPA Kinman is a firm that is benefiting substantially from Harney’s programme of so-called ‘reform’ via lucrative ‘consultancy’ contracts paid out of the public purse to assist in the privatisation of the health service even while patients die as a direct consequence of the deliberate under funding of the health service. The IBEC and US health insurance industry backed assault on Irish health care provision is meanwhile dutifully dressed up by journalists and politicians alike as measures to secure what is shamefully referred to as ‘efficiency’. Efficient for whom, exactly? Efficient as in the universally acknowledged disaster that is US health care provision but which Minister Harney in her driven wisdom is ruthlessly foisting on us all?

As with the health service, the give-away of our national oil and gas resources will of course be highly efficient for foreign owners and shareholders of corporates such as Shell Oil (Dutch), Marathon (British) and Statoil (Norwegian). Unlike in Norway where every citizen enjoys substantial benefits from the national stake in that country’s natural resources, the situation in Ireland sure as hell ain’t going to be efficient for you and me. Imagine if we now had those lucrative natural resources to help us through this? As ever, it’s the working poor – the economic and labour backbone of the country - who will be most severely affected by all this efficiency in the shape of a hundred different taxes - and who will also feel the brunt of crippled public services. The government’s arrogant disregard for managing our resources in the interests of everyone rather than the wealthy few has never been more apparent. It’s time for Irish people to protest loudly about this and for the media to give up its hushed reverence for the political and big business interests who have ruined us. One national Sunday newspaper has brazenly claimed there is ‘overwhelming public support’ for the bank bailout. Let’s have no more of this propaganda bailout for the shysters by the media. Does anyone seriously believe a word of that claim? Of course, it’s hardly a coincidence that it was made in a newspaper owned by an already outrageously wealthy man who, having given up his Irish citizenship to become a peer of the British realm, has become even more obscenely wealthy in recent years - largely as a result of obscenely favourable treatment by the Fianna Fail government - and who has personally made an estimated 2 billion dollars out of the economic treason of the Irish gas and oil give-away. Meanwhile back at the ranch: homelessness is massively on the increase despite thousands of empty houses built for tax reasons by the very property developers responsible for the success of Bertie Ahern’s political career and the economic ruination of the country in equal and correlative measure, but which are nevertheless lying idle all over the country; young people are facing the reintroduction of university fees which will cause them to go into serious debt at the beginning of their adult lives, the elderly are facing increased health insurance premiums for worsening services, people with disability continue to suffer chronically under funded services, road projects are being abandoned and the number of desperately needed front line public service staff is being pared back. Now we know exactly what MacDowell meant when he said ‘a little inequality is a good thing’.

An excellent analysis by David Manning at MediaBite of the media's response to the economic crisis:

Quote :

Towards the end of Tuesday night's edition of TV3 current affairs programme 'Nightly News with Vincent Browne' the host asked one of his guests, almost rhetorically, whether the media have some responsibility for the artificial inflation of property prices in their promotion of the market through property supplements and advertising. His guest agreed that to some extent the media did play a part in that hyping.

In the closing moments the same guest commented on the front page of the next day's Irish Times, an 'extraordinary juxtaposition' of an image of Minister for Finance Brian Lenihan, who had just struck a deal to underwrite the bad debts of Ireland's major financial institutions to the tune of €400 billion, looking somewhat 'haunted', while just beneath, an advertisement for an Irish based bank displayed it's current lending rates. Browne responded, "Well that's the way things go." [Nightly News with Vincent Browne, TV3, 30/09/08] [1]

And with that the corporate media concluded the audit of its performance during the boom years. No failure on its part, whether it be the promoting of over valued property or irresponsible lending practices, could now prevent them from striking a populist tone in the face of a systematic failure. It is apparently irrelevant that these same institutions were instrumental in bringing about this crisis. Retrospect is after all only for 'old lefty whingers' – the conventional wisdom tells us there are no solutions to be found in looking backwards.

The rest of the analysis is at this link:

http://www.mediabite.org/mediashots_latest.html

A very welcome post. I'm tied up today and will join this thread tomorrow.

Aragon wrote:

An excellent analysis by David Manning at MediaBite of the media's response to the economic crisis:

Quote :

Towards the end of Tuesday night's edition of TV3 current affairs programme 'Nightly News with Vincent Browne' the host asked one of his guests, almost rhetorically, whether the media have some responsibility for the artificial inflation of property prices in their promotion of the market through property supplements and advertising. His guest agreed that to some extent the media did play a part in that hyping.

In the closing moments the same guest commented on the front page of the next day's Irish Times, an 'extraordinary juxtaposition' of an image of Minister for Finance Brian Lenihan, who had just struck a deal to underwrite the bad debts of Ireland's major financial institutions to the tune of €400 billion, looking somewhat 'haunted', while just beneath, an advertisement for an Irish based bank displayed it's current lending rates. Browne responded, "Well that's the way things go." [Nightly News with Vincent Browne, TV3, 30/09/08] [1]

And with that the corporate media concluded the audit of its performance during the boom years. No failure on its part, whether it be the promoting of over valued property or irresponsible lending practices, could now prevent them from striking a populist tone in the face of a systematic failure. It is apparently irrelevant that these same institutions were instrumental in bringing about this crisis. Retrospect is after all only for 'old lefty whingers' – the conventional wisdom tells us there are no solutions to be found in looking backwards.

The rest of the analysis is at this link:

http://www.mediabite.org/mediashots_latest.html

The “media” have some responsibility for “hyping” the property market, just as they have some responsibility for “hyping” the downturn. Why would we be surprised? as an industry all they have to offer is “hype”, it is the single product produced by their business.

tonys wrote:

Aragon wrote:

An excellent analysis by David Manning at MediaBite of the media's response to the economic crisis:

Quote :

Towards the end of Tuesday night's edition of TV3 current affairs programme 'Nightly News with Vincent Browne' the host asked one of his guests, almost rhetorically, whether the media have some responsibility for the artificial inflation of property prices in their promotion of the market through property supplements and advertising. His guest agreed that to some extent the media did play a part in that hyping.

In the closing moments the same guest commented on the front page of the next day's Irish Times, an 'extraordinary juxtaposition' of an image of Minister for Finance Brian Lenihan, who had just struck a deal to underwrite the bad debts of Ireland's major financial institutions to the tune of €400 billion, looking somewhat 'haunted', while just beneath, an advertisement for an Irish based bank displayed it's current lending rates. Browne responded, "Well that's the way things go." [Nightly News with Vincent Browne, TV3, 30/09/08] [1]

And with that the corporate media concluded the audit of its performance during the boom years. No failure on its part, whether it be the promoting of over valued property or irresponsible lending practices, could now prevent them from striking a populist tone in the face of a systematic failure. It is apparently irrelevant that these same institutions were instrumental in bringing about this crisis. Retrospect is after all only for 'old lefty whingers' – the conventional wisdom tells us there are no solutions to be found in looking backwards.

The rest of the analysis is at this link:

http://www.mediabite.org/mediashots_latest.html

The “media” have some responsibility for “hyping” the property market, just as they have some responsibility for “hyping” the downturn. Why would we be surprised? as an industry all they have to offer is “hype”, it is the single product produced by their business.

I agree with you entirely Tonys that there is, sadly, nothing surprising about media hype of any kind. That's the whole point of the post, in a way. The world is in a seriously dangerous situation and it is high time that the media grew up and started to provide real information and real journalism which does not flinch from telling it like it is. It's failure to do so is one of the most atrocious aspects of capitalist dominated society - it cultivates ignorance at a time when it should be acting responsibly. Why, for instance, outside of internet fora, do we almost never read about Alan Greenspan's outrageously irresponsible de-regulation of the US financial services markets in the pages of The Irish Times. That was where this all began, if we had to pinpoint it to any one source - and of course there are other contributing factors. The media has a great role to play in holding us all to account for the consequences of our behaviour. Can any journalist seriously pen an article about benefit fraud when they can barely muster a tut-tut for the calculated fraud of the free market - as promoted downright deceitfully by those who knew fine well that it was only themselves who could ever benefit at the expense of the vast majority.

Quote :

The “media” have some responsibility for “hyping” the property market, just as they have some responsibility for “hyping” the downturn. Why would we be surprised? as an industry all they have to offer is “hype”, it is the single product produced by their business.

Fair point. The expansion of the bubble was very much fuller of elation than any scandalous dissent had any value of attraction yet the sanguine view could have been taken too.

But what and who were the dissenting voices all along besides those on The Property Pin? And how was it that we simply weren't comparing prices to other European capitals and seeing the difference? When we looked at England we just saw a better bubble so no useful soberingly negative comparison there. I mentioned before on another thread how David McWilliam's show on TV3 on Sundays disappeared I think - he would have been a bit of a spoilsport to have had around and indeed was spoken of as such. What's interesting is how the "whingers and moaners" were branded as such when it would have been sobering to have listened to them. We know what they were asked to do with themselves by Bertie Ahern.

I think the below point at the start of the article refers to a later stage in the boom - 2006 was not a time for stoking it any more unless it is designed to appeal to the super rich who have hundreds of thousands to squander on trophies. (I'm glad Duncan Stewart escaped mention in that piece - phew.)

Quote :

What is not referred to is the symbiotic relationship between the corporate media and big business, a relationship that put newspapers and media outlets at the virtual helm of the property boom titanic. In July 2006 for instance the Irish Times bought the property website MyHome.ie for €50 million. Three months earlier Tony O'Reilly's Independent News & Media acquired PropertyNews.com, the "largest internet property site on the island of Ireland." Along with their competitors, the Irish Times and Irish Independent promoted the sale and purchase of vastly over valued properties to consumers - invariably under the disingenuous presumption that property value is a function of time.

Quote :

The world is in a seriously dangerous situation and it is high time that the media grew up and started to provide real information and real journalism which does not flinch from telling it like it is.

Now there's a point. I think the basis must be a more educated public. Not a time for slashing education budgets ... first hang the stockbrokers then the education-budget slashers.

It's not the stockbrokers, media, property speculators etc. that are responsible for this, it is the secret civil service who connived with academic mathematicians forty or more years ago to bring in the so called new mathematics, and dump much of the practical computation techniques. Now people are so bad at computation that the don't know when they are being conned.
One interesting word from Article 1 of the Irish Constitution, is geileagar, which refers to the economy. Without going deep into it, another interesting word is geallglacadóir, the Irish for a bookie. These two words have similar prefixes, and it would seem that the global financial markets are nothing but one big gambling house.

If the Minister for Finance was doing his job properly he would be ensuring the Article 1 was being enforced. That would mean that all financial instruments, and controls should initially be transformed into Irish as a prelude to obeying Article 1, it would also mean that all financial control software would have been adapted into Irish. This language barrier would have ensured that the current chaotic siituation would not have occured. I will shortly begin a project to do exacly this.

The following is a quote from RTE's Statement of Commitments 2008

Quote :

RTÉ’s values are to:
 Operate in the public interest, providing News and Current Affairs that is fair and
impartial, accurate and challenging
 Connect with our audiences by understanding and satisfying their needs
 Deliver a value for money service
 Be creative in everything we do
 Be honest and transparent in all of our activities
 Take personal responsibility for pursuing the Organisation’s goals
 Be responsible to our employees and consider everyone as an individual
 Optimise the performance of each person, department, division and the Organisation
by working together
 Respect each other and our diversity
 Take pride in everything we do, everything we are and everything we create
It is clear from these statements that RTÉ believes that trust is the foundation stone of
its relationship with the audience and that the organisation strives to ensure it can be
trusted to be independent, impartial and honest in all of its activities.

http://www.rte.ie/about/organisation/statement_eng_08.pdf

I love the "be creative in everything we do" bit

honestly, if bank officials can't understand the full implication of a credit default swap, or total return swap in english, how do you think translating it into irish would help!

i presume you posted your comment firmly tongue in cheek!

zakalwe wrote:

honestly, if bank officials can't understand the full implication of a credit default swap, or total return swap in english, how do you think translating it into irish would help!

i presume you posted your comment firmly tongue in cheek!

I think his point is that a translation into Irish would reveal that there was a bigger element of gambling in property purchase than anyone thought. No one seemed to think of anything there at the time - it was all a great bet but it would have been worth a bit of pause for thought.

Could our airwaves have translated what a CDS was earlier by the way? This is the premium paid on risk (?) and in particular government debt? Isn't it the responsiblity of someone to publish this risk assessment of Irish stock and why wasn't it done and indeed how long ago might it have made a scary story in the media?

Auditor #9 wrote:

zakalwe wrote:

honestly, if bank officials can't understand the full implication of a credit default swap, or total return swap in english, how do you think translating it into irish would help!

i presume you posted your comment firmly tongue in cheek!

I think his point is that a translation into Irish would reveal that there was a bigger element of gambling in property purchase than anyone thought. No one seemed to think of anything there at the time - it was all a great bet but it would have been worth a bit of pause for thought.

Could our airwaves have translated what a CDS was earlier by the way? This is the premium paid on risk (?) and in particular government debt? Isn't it the responsiblity of someone to publish this risk assessment of Irish stock and why wasn't it done and indeed how long ago might it have made a scary story in the media?

i see. but even in english, all business is based on some element of risk. indeed, over the past few years the authorities have been placing greater emphasis on disclosing risk to users of financial information. that they ignored that information is beside the point. you can take a horse to the water but cannot make him drink.

i've spent the past few years working on basle 2, ifrs 7 and ias32 &39 disclosures for a bank. i guarantee you that less than 1% of the people to whom we distributed financial statements to, read those disclosures. the risk assessments were there. they were audited. they may not have anticipated the current crash but they gave a realistic assessment of risk as the information stood.

zakalwe wrote:

Auditor #9 wrote:

zakalwe wrote:

honestly, if bank officials can't understand the full implication of a credit default swap, or total return swap in english, how do you think translating it into irish would help!

i presume you posted your comment firmly tongue in cheek!

I think his point is that a translation into Irish would reveal that there was a bigger element of gambling in property purchase than anyone thought. No one seemed to think of anything there at the time - it was all a great bet but it would have been worth a bit of pause for thought.

Could our airwaves have translated what a CDS was earlier by the way? This is the premium paid on risk (?) and in particular government debt? Isn't it the responsiblity of someone to publish this risk assessment of Irish stock and why wasn't it done and indeed how long ago might it have made a scary story in the media?

i see. but even in english, all business is based on some element of risk. indeed, over the past few years the authorities have been placing greater emphasis on disclosing risk to users of financial information. that they ignored that information is beside the point. you can take a horse to the water but cannot make him drink.

i've spent the past few years working on basle 2, ifrs 7 and ias32 &39 disclosures for a bank. i guarantee you that less than 1% of the people to whom we distributed financial statements to, read those disclosures. the risk assessments were there. they were audited. they may not have anticipated the current crash but they gave a realistic assessment of risk as the information stood.

See it's not just a translation between languages like Irish and English but also concerns semantics or meaning of terms. For the public, property seemed to be a great investment - you couldn't lose if you had the money - but, for many people in the know in the banking and credit sector they were privy to information and damning statistics. Isn't it necessary for someone to come along and translate technical language as much as it is a natural language?

CDS basis-points I interpret refers to risk and behind that refers after that in bookies language to chances and odds. Ireland, the UK, the US and Spain have high premiums on insuring their debt, translation: high risk, translation: lengthening odds on meeting repayments, translation: bad time to invest in property.

I might have got that wrong there please feel free to correct it if you have the time but basically the tone of the words "investment" should have been changing somehow to words like "risky". In layman's language: "house prices are ridiculous, it can't last".

As I posted before, houses in Dublin went from 860k to 575k in two years. It was someone's duty to tell people those facts as it was someone's duty to try to find out if their purchase was a "good investment". In fact, do we still think an 860k three-bedroomed house in South County is a good investment? And who mediates or should mediate this info?

i think we should define our meaning of the term property. if its your ppr (principle private residence) then it should not be looked at in investment terms.

i don't know if you're caught up in the property market fallacy i.e you can make millions on your own home. if its part of your investment portfolio then its less bad to leverage off gains. however thats due to the tax treatment of investment property.

i saw the crash as far back as 2006. i sold my place (it was an investment property) in nov06. when i saw "seminars" on how to earn millions from property i knew that all the opportunity was gone from the market and the sh1t left over was being flogged to the clueless. while not taking blame from the snakeoil salesmen, people's greed and foolishness tripped them up, not the banks. the banks did not put a gun to purchasers head to take out a massive mortgage or hide details. people are adults who have to be responsible for their actions.

no doubt there were some clearly reckless lending, such as the anecdote about someone getting morgaged up to their necks and being offered a car loan on the way out the door. but the fact remains that those people who thought they saw a great deal (150k for a two bed apt in sofia) would have kept trying for loan until they got it. so the dodgy loan would have been sitting somewhere.

zakalwe wrote:

i saw the crash as far back as 2006.

The economist was predicted a bust as early as 2002/3. In fact every subsequent year they predicted that Ireland and Spain would go down. I remember the editor said he would eat his hat if Ireland did not burts in 2005. It didnt.
I myself lost a bit of faith in the magazine and in predictive economics because of that.
I think we now know that the bubble should have burst in 2001/2 but artificial forces conspired to keep it going for another half a decade - which has thrown everything especially peoples jobs and livelyhoods up in the air.
By right the people should demand an inquest - we should try(or at least condemn) those in positions of power who were either guilty or inept and make sure it never happens again.

While many US bank's ratings are in the gutter, the stockbroker's ratings are very good and their capitalisation ratios the envy of nearly every US bank. You see stockbrokers are only brokers. They take a commission from punters who buy and sell stocks. Brokers will of course have stock inventories but they are very choosy about what they hold. Therefore, I'm confused why they should be hanged. Hell, they are even the messengers in this whole episode.

You might, and erroneously imo, blame hedge funds who help determine a stock's price in the daily auction markets, but the stockbroker's aren't to blame in the least. I, personally, would never listen to a stockbroker's advice but I don't begrudge them their living. Literally, in this case.

rockyracoon wrote:

While many US bank's ratings are in the gutter, the stockbroker's ratings are very good and their capitalisation ratios the envy of nearly every US bank. You see stockbrokers are only brokers. They take a commission from punters who buy and sell stocks. Brokers will of course have stock inventories but they are very choosy about what they hold. Therefore, I'm confused why they should be hanged. Hell, they are even the messengers in this whole episode.

You might, and erroneously imo, blame hedge funds who help determine a stock's price in the daily auction markets, but the stockbroker's aren't to blame in the least. I, personally, would never listen to a stockbroker's advice but I don't begrudge them their living. Literally, in this case.

Kieran Allen of the SWP (of which I am not a member nor would I be) has written a good article summarising the basis for the catastrophe.

http://www.swp.ie/news/latest/financialmeltdownwhycapitalismisinamess.html

For anyone not particularly familiar with financial markets it is very helpful. He also makes a cogent assessment of the folly of capitalism and its intrinsic inability to right itself when things go wrong. As he says, the solution is always a temporary fix of more of the same, only more so, with ever more serious crashes and crises following on one from another. One congressman in the US has reported that representatives were told that the US government threatened the introduction of martial law and other dire consequences if they did not vote for the bill. Whatever your view of leftwing politics there can be few people who would not now wish that much of what the Kieran Allen's of the world are saying had been taken into far greater consideration than it was. It has been fashionable for journalists to scoff and sneer at socialism as a vastly inferior political philosophy to capitalism. But capitalism ain't looking so clever now, is it?

Well, now, Aragon, that open's up an entirely different tin of worms. The philosophical basis of capitalism is a vast subject. Allen and many others have their own views and biases, as do I. There will be questions about systemic failure, pricing mechanisms such as auctions for derivatives and just plain slating of the entire political-economic model.

Imho, there will be a few tweeks here and there. The overall system will not change. There may be a difference of emphasis for some while between the road the US is taking and that which Europe will take. Of course, there are external factors in play as well - diminishing commodities, the rise of China and India, and the weakening of the US model.

The factors are complex and the media presentation of them either superficial or biased to the status quo. Me, I'm taking a truely selfish road. I'm going to make sure I can protect whatever income I have and safegaurd my assets. This requires that I get as clued-up as quickly as possible and use whatever I learn as quickly as possible. Ignorance will lead to poverty in more ways than one.

I particularly like this quote which I read yonks ago: "Communism has failed but Capitalism hasn't won either".

rockyracoon wrote:

Well, now, Aragon, that open's up an entirely different tin of worms. The philosophical basis of capitalism is a vast subject. Allen and many others have their own views and biases, as do I. There will be questions about systemic failure, pricing mechanisms such as auctions for derivatives and just plain slating of the entire political-economic model.

Imho, there will be a few tweeks here and there. The overall system will not change. There may be a difference of emphasis for some while between the road the US is taking and that which Europe will take. Of course, there are external factors in play as well - diminishing commodities, the rise of China and India, and the weakening of the US model.

The factors are complex and the media presentation of them either superficial or biased to the status quo. Me, I'm taking a truely selfish road. I'm going to make sure I can protect whatever income I have and safegaurd my assets. This requires that I get as clued-up as quickly as possible and use whatever I learn as quickly as possible. Ignorance will lead to poverty in more ways than one.

I particularly like this quote which I read yonks ago: "Communism has failed but Capitalism hasn't won either".

I can understand your point of view - people really dont have any option, in the absence of responsible government, but to look after themselves individually at the moment. The government is basically saying that the devil can ake the hindmost. Here's an interesting piece below from former Labour minister Michael Meacher on the grave precedent being set by the Irish government and the impossibility that the international markets can cope with this sort of strategy on an international scale. That said, no other country is going to allow the Irish to secure an advantage at their expense. The logical conclusion is that Ireland should be prevented from doing what its doing because the lemming like markets will create a disaster of mythical proportions unless we are stopped.

Quote :

The Irish Question

Today's emergency summit of EU leaders at the Elysee Palace in Paris is more important than the normal photocalls might suggest. Ireland's decision - now largely followed by Greece - to put a State guarantee under not only retail depositors, but also more significantly international investors' debt as well as wholesale deposits and inter-bank loans poses a huge challenge not only to other EU countries, but also to regulators worldwide.

In today's market conditions international funds will rapidly migrate to wherever their money will be secure. If then other EU countries follow the Irish lead because otherwise their own banks would be disadvantaged, the costs to national treasuries (and their taxpayers) could be astronomical. Britain's GDP amounts to £1.5 trillion, but the cost of underwriting every bank in Britain could be up to £9 trillions. That could put even Paulson's $700bn US bail-out in the shade.

If on the other hand EU countries do not go down the Irish route, their financial institutions suffer a competitive disadvantage compared to the Irish (and Greeks) which could be seriously damaging. Moreover, it drives a coach and horses through the whole idea of the EU internal market as a level playing field, as the EU Commissioner Nellie Kroes plaintively acknowledged yesterday.

The situation is worryingly reminiscent of the self-defeating competitive devaluations of the 1930s. Faced with a desperate need to escape the depression dragging everyone down, countries opted to lower their currencies to seize a larger share of whatever international economic activity remained. But when other countries followed suit to protect themselves, any unilateral benefit was quickly eroded and all finished at relatively much the same position, but at one or two notches lower as the economy contracted.

How to avert a similar disaster this time round - not of depression, but rather of even sovereign countries facing potential bankruptcy as the guarantees underwritten escalate? Doubts have already arisen whether the Irish Government can in fact meet all the guarantees it has now offered.

Maybe the solution is not to try to underpin all banks irrespective of their capitalisation, but only banks whose funding composition makes them good risks. 'Bad' banks, i.e. those over-dependent on toxic securitised derivatives, should perhaps then be bundled together and, whilst protecting their despositors' funds, their toxic assets would be sold off at the best prices that could be secured in the market. The Swedish Government pioneered a similar scheme in the early 1990s, and with considerable success. It would preserve a measure of moral hazard as a future warning for the banks, whilst at the same time avoiding the risks and cost of an indiscriminate all-or-nothing bail-out.

Any hope the EU might today arrive at such an ingenious resolution of the current crisis? I wouldn't hold your breath.

(Source: ]The Irish Question (c) 2008, Michael Meacher. http://www.michaelmeacher.info/weblog/)

And Jim Kunstler comments on the black hole into which US 700 billion dollar bailout has more or less already disappeared:

Quote :

October 06, 2008

All Fall Down

God knows what manner of deals went down this past weekend in the Hamptons wine cellars and below-decks among the Chesapeake Bay sailboat fleet. All these hidey-holes must have been dank and fetid with the sweat of mortal fear. Will the US Government declare itself a subsidiary of General Electric? Will Vlad Putin be roped in to save Goldman Sachs? Meanwhile, the whole noisome rat maze of international counter-party deals was taking on sewer water and rodents of every nationality were seen leaping for daylight all over the fusty old motherlands of Europe. A cascading collapse of international finance is underway. While many fixers may jump heroically into the tumbling wreckage hoping to rescue this-and-that, the outcome by Friday is liable to be an unrecognizable smoldering landscape of the G-7's hopes and dreams.

Some big questions for the week: will the Euro survive as a currency? Will the rush into the US dollar continue even as the US financial system dematerializes in a Fibonacci fever of accelerating de-leveraged infinitude? Will the remaining Big Boyz, Goldman Sachs and JP Morgan succumb to the counter-party hemorrhagic fever? Will great rows of lesser banking dominoes now start clacking onto their faces? Will all fifty states follow the leads of California and Massachusetts and line up at the US Treasury's hand-out window. Will the entity that calls itself the civilized world be left at week's end with anything resembling money?

Your guess is as good as mine. We've entered the realm of phase change, where everything is slipping and nothing has settled. The final result, when the dust settles -- and that may not be for weeks to come -- will certainly be a poorer western world. Will it be so poor that it can no longer afford to import anything? Including oil from the land of the date palm? If so, we are really in for a rough ride, poised as we are at the edge of the heating season here in the temperate regions. Notice, by the way, that the $700 billion just approved by congress to bail out Wall Street is exactly the same sum of money that we send to the oil exporting nations this year.

Will millions stop receiving paychecks due to the turmoil in banking? It's certainly possible, starting with the poor drones in Mr. Schwarzenegger's motor vehicle bureau and eventually ranging to every payroll office in the land. Will Sarah Palin's fellow Six-packers line up around the parking lagoons of the suburban banks trying desperately to withdraw the last seventy bucks in their checking accounts? (And will their thoughts in the event be: this economy is fundamentally sound....) Will the supermarket shelves of chipoltle-flavored crunchy snacks and power drinks go empty as truckers refuse to deliver their loads without up-front payment? And how long does it take a hungry public to turn mean?

We could see a parallel problem in the motor fuel supply sector. So far, gasoline shortages have only appeared in parts of the Southeast USA, due to interruptions caused by two hurricanes. If the oil tankers quit offloading now for lack of credible payment, then the whole nation will get an interesting lesson in the shortcomings of the suburban development pattern.

The candidates' debate Tuesday night should be interesting. I don't expect too much give-and-take on the subject of East Ossetia this time around.

Even at this point, the current crack-up in world finance makes the 1929 crash and the events of the 1930s look in comparison like an orderly small town auction of somebody's grandmother's effects. Back in that sepia day, America had plenty of everything except ready cash. We had, especially, plenty of our own oil, and -- you're not going to believe this but it's true -- the stuff was selling for as little as ten cents a barrel, it was so abundant. And yet still, America in the 1930s plunged into a dark depression of inactivity, loss of confidence, and impoverishment.

This time around, things could get more disorderly. Personally, I think we may be beyond the reach even of fascist authoritarianism, because unlike the programmed industrial masses of the 1930s, we are unused to regimentation, to lining up at the factory gates and the movie theaters. Back then, society was so regimented that everybody wore uniforms in-and-out of the military. Look at movies from the 1930s. Every man-jack wore either a necktie and hat or overalls. The industrial masses behaved like termites. Once unemployment hit, they were waiting to be told what to do, to line up for something. It worked fabulously for Hitler, who took every advantage of this mentality. Luckily, the US went for Roosevelt (both FDR and Hitler entered office the same winter of 1933, by the way). FDR was more like everybody's kindly Uncle Frank, and his reassuring persona enabled Americans to suck up their bad luck and altered circumstances. Many of them retreated to the family farm (which still existed then) and waited things out -- and, anyway, the melodrama of the Great Depression soon resolved in the Second World War when Hitler's love of regimentation led him into military misadventure. He shouldn't have picked a fight with someone who had so much petroleum -- end-of-story.

Okay, what happens here and now? To this point (9:am Monday October 6, 2008) events have been proceeding under a veneer of still-just-barely-credible authority. We (as represented by congress) have allowed Mr. Paulson to advance and activate his remedies. As things unspool further, he will be out of credibility, perhaps in a few days, and it's unlikely that his successor will have any either. Mr. Bernanke has simply gone AWOL. Notice, he has vanished from the media landscape. We may soon be hearing the declaration of various "emergency" measures involving the allocation of food and the rationing of oil products. The Big Bailout of last week may be partially rescinded as it becomes obvious that it has had no effect -- I believe about half the $700 has already been allocated, which is to say: lost. I realize these things sound pretty extreme. But forces have been set in motion and momentum rules. One thing for sure: the American public is about to undergo a severe mood adjustment. There will be fewer American Idol fans and worshippers of Donald Trump by the close of business on Friday.


(Source: All Fall Down (c) 2008, Jim Kunstler. http://jameshowardkunstler.typepad.com/)

floatingingalway wrote:

The following is a quote from RTE's Statement of Commitments 2008

Quote :

RTÉ’s values are to:
 Operate in the public interest, providing News and Current Affairs that is fair and
impartial, accurate and challenging
 Connect with our audiences by understanding and satisfying their needs
 Deliver a value for money service
 Be creative in everything we do
 Be honest and transparent in all of our activities
 Take personal responsibility for pursuing the Organisation’s goals
 Be responsible to our employees and consider everyone as an individual
 Optimise the performance of each person, department, division and the Organisation
by working together
 Respect each other and our diversity
 Take pride in everything we do, everything we are and everything we create
It is clear from these statements that RTÉ believes that trust is the foundation stone of
its relationship with the audience and that the organisation strives to ensure it can be
trusted to be independent, impartial and honest in all of its activities.

http://www.rte.ie/about/organisation/statement_eng_08.pdf

I love the "be creative in everything we do" bit

This corporate speak stuff would be funny if it weren't so serious - RTE is tame to the point of stupor about criticising the government. Eoighean Harris and his ilk successfully de-bollocked RTE(apologies for the sexism and vulgarity but the word has a satisfying sound quality that serves the point imo) some time ago and its television and radio news is at this stage so unctious it is unwatchable/unlistenable. Sadly, way too many people lap this stuff up as if it was gospel. My pet hates are Brian Dobson and Pat Kenny. Dobson reads the news like a sermon from a patronising parson, chiding his listeners about what they are to think about everything. Kenny is an intelligent man rendered extremely foolish by his career-advancing compromises at the expense of integrity and truth. He is screamingly bad on the Late Late where he serves up government propaganda like a dutiful party hack - often without even a nod in the direction of balance or fairness. We can forget entirely any possibility that we will see any sort of fearless, searching journalism from these bonzos or from anyone at RTE, for that matter. The scandal of it all is that there has scarcely been a time when a strong media was so badly needed.

TheGeniusFromCork wrote:

It's not the stockbrokers, media, property speculators etc. that are responsible for this, it is the secret civil service who connived with academic mathematicians forty or more years ago to bring in the so called new mathematics, and dump much of the practical computation techniques. Now people are so bad at computation that the don't know when they are being conned.
One interesting word from Article 1 of the Irish Constitution, is geileagar, which refers to the economy. Without going deep into it, another interesting word is geallglacadóir, the Irish for a bookie. These two words have similar prefixes, and it would seem that the global financial markets are nothing but one big gambling house.

If the Minister for Finance was doing his job properly he would be ensuring the Article 1 was being enforced. That would mean that all financial instruments, and controls should initially be transformed into Irish as a prelude to obeying Article 1, it would also mean that all financial control software would have been adapted into Irish. This language barrier would have ensured that the current chaotic siituation would not have occured. I will shortly begin a project to do exacly this.

That's no coincidence. It's from the Irish geall, i.e. pledge, security, mortgage, hostage, bet. The economy is viewed as an intricate network of sureties and pledges (or if you want, bets) in Irish, hence geill-eagar. Geallghlacadóir just means bet/acceptor, hence bookie. Another interesting one is geallearbóir, one who holds pledges in trust, which is a pawnbroker

riadach wrote:

TheGeniusFromCork wrote:

It's not the stockbrokers, media, property speculators etc. that are responsible for this, it is the secret civil service who connived with academic mathematicians forty or more years ago to bring in the so called new mathematics, and dump much of the practical computation techniques. Now people are so bad at computation that the don't know when they are being conned.
One interesting word from Article 1 of the Irish Constitution, is geileagar, which refers to the economy. Without going deep into it, another interesting word is geallglacadóir, the Irish for a bookie. These two words have similar prefixes, and it would seem that the global financial markets are nothing but one big gambling house.

If the Minister for Finance was doing his job properly he would be ensuring the Article 1 was being enforced. That would mean that all financial instruments, and controls should initially be transformed into Irish as a prelude to obeying Article 1, it would also mean that all financial control software would have been adapted into Irish. This language barrier would have ensured that the current chaotic siituation would not have occured. I will shortly begin a project to do exacly this.

That's no coincidence. It's from the Irish geall, i.e. pledge, security, mortgage, hostage, bet. The economy is viewed as an intricate network of sureties and pledges (or if you want, bets) in Irish, hence geill-eagar. Geallghlacadóir just means bet/acceptor, hence bookie. Another interesting one is geallearbóir, one who holds pledges in trust, which is a pawnbroker

That's interesting riadach and quite true. The economy is based on a webwork of pledges, securities and future-based transactions. Árachas is the Irish for insurance, what would be the background to that word?

It is also connected to the word for surety.

riadach wrote:

TheGeniusFromCork wrote:

It's not the stockbrokers, media, property speculators etc. that are responsible for this, it is the secret civil service who connived with academic mathematicians forty or more years ago to bring in the so called new mathematics, and dump much of the practical computation techniques. Now people are so bad at computation that the don't know when they are being conned.
One interesting word from Article 1 of the Irish Constitution, is geileagar, which refers to the economy. Without going deep into it, another interesting word is geallglacadóir, the Irish for a bookie. These two words have similar prefixes, and it would seem that the global financial markets are nothing but one big gambling house.

If the Minister for Finance was doing his job properly he would be ensuring the Article 1 was being enforced. That would mean that all financial instruments, and controls should initially be transformed into Irish as a prelude to obeying Article 1, it would also mean that all financial control software would have been adapted into Irish. This language barrier would have ensured that the current chaotic siituation would not have occured. I will shortly begin a project to do exacly this.

That's no coincidence. It's from the Irish geall, i.e. pledge, security, mortgage, hostage, bet. The economy is viewed as an intricate network of sureties and pledges (or if you want, bets) in Irish, hence geill-eagar. Geallghlacadóir just means bet/acceptor, hence bookie. Another interesting one is geallearbóir, one who holds pledges in trust, which is a pawnbroker

I didn't know hostage and promise had the same root. Sounds a bit Isidore of Seville-ish to me. So a bookie is a hostage-taker?

Indeed. It's based on the concept of suretyship. A hostage was taken in order to ensure that a deed was carried out, or that loyalty remained. Therefore surrendering hostages could therefore be viewed as a pledge by he who surrenders to carry out a certain act or deed.