Lately I've been mulling over the whole bank guarantee scheme and the subsequent nationalisation of Anglo Irish Bank. There's a lot about it which doesn't sound or feel right, so in order to progress this along, I'm going to talk about the elements involved and as a consequence, a theory that I wish to proffer for your entertainment.
Let's start with some assumptions.
1. We know that in 2008 INBS bonds were rated just one level above junk status. We know that numerous issues involving the running of the bank had been raised at AGM level and in all the national media. We know that Brian Cowen had gone out of his way to facilitate INBS to be demutualised. In short, this was a financial organisation that was allowed to do whatever it felt appropriate without any objectivity from the financial regulator or the Central Bank, let alone the Minister of Finance.
2. We know that in 2008 Anglo-Irish was in huge trouble. The bond markets had given their verdict during Drumm's attempts to raise more capital in his US roadshow in the summer of 2008; there were no takers. Of all the indigenous financial institutions on ISEQ, Anglo were looked upon as being the weakest link, and by targeting the bank, the markets were effecting all said institutions.
3. Now we move to the night of the 29th of September 2008. Apparently no record or minutes were ever taken to explain or substantiate what happened that night. But it does appear, at least from my perspective, that a decision was already place before that fateful night. We know that the various executives and chairmen of BoI and AIB were entertained, albeit briefly, before they were informed of the governments decision. But it is quite clear, that nothing that the banks representatives said or did, had any bearing on the final decision to guarantee all the liabilities of all the indigenous lending institutions.
4. It's interesting that the bank guarantee scheme is unique to Ireland. Other countries nationalised or part-nationalised their financial institutions who were suffering difficulties. Most countries offered some form of guarantee on deposits. But nobody went to the altar of cojones on the block like we did.The reactions to the newly announced scheme varied from hostile (the UK), to perplexed and surprised (the ECB) to wholehearted support (the US and financial markets).
5. It is possible to believe that Brian Cowen and Brian Lenihan were unaware of the seriousness of the banks financial position in September 2008. Certainly there can be no doubt that the banks had systemically lied about their capitalisation to all and sundry. What's not possible to believe however, is that in the four months from guarantee to nationalisation for Anglo Irish, that the Finance minister (presumably having eventually read the auditors reports) considered the institution to be of systemic economic importance to the State.
6. The guarantee scheme spawned the nationalisation of Anglo and the subsequent strain on our finances in conjunction with the recapitalisation of INBS. Everyone agrees that the other financial institutions are systemic to our economy and worth saving, regardless of the price. Only the government seems to think the same applies to Anglo and INBS. Under the terms of the scheme we are stuck to this course of action until Sept 2010 when a new guarantee scheme will be put in place. We are told that the new scheme will be a watered down version, but little detail has been discussed. Is there an implicit threat that the government will rescind its guarantee to bondholders in Anglo and INBS and use that to wind down the banks and give only a percentage back to the bondholders? No one can say, but the threat, if real, remains.
7. In the meantime, our borrowings are forecast to explode over the next few years as we play catch-up with Greece. Now there is no comparison between the two countries if we are to be honest. We don't have to borrow €50b or so for each of the next three years. We haven't systemically lied about our financial situation. We are in the middle of an approved austerity program organised to get our deficit under some control. And yet, don't you find that we get an enormous amount of credit from the international financial community? That we are held as some international paragon in comparison to the pariah state that is Greece. The markets aren't stupid, they know only too well how bad the situation is, and will be, in Ireland, much as they knew how bad things were in INBS and Anglo.
8. Which brings us to the government bond auctions by the NTMA. They are always, repeat always, a stunning success. Always oversubscribed, always 100% facilitated, a great pat on the back for the financial and economic strategies of this government.
9. So this brings me to my thesis. It is my belief and opinion that prior to Sept 2008, we have done a deal with the international markets. From a conspiracy perspective you can argue that this was facilitated by the Bilderberg Group, or the Wandering Jew, or Jesse Ventura. It doesn't really matter. What we have here is the biggest quid pro quo in Irish financial history. In this we, the people, as represented by B&B, are guaranteeing all the liabilities of the banks, and specifically, all the international bondholders. In return for having all their bonds guaranteed by the state, these same institutions are beholden to make encouraging noises about our fiscal strategy and of course, buy up our auctions of government bonds.
10. So far this dance of financial symbiosis has been adhered to by both parties. The government, because of the 2 year duration of the guarantee scheme, and the bondholders/investors because of the uncertainty of what happens when the guarantee is up.
Showing posts with label Fianna Fail. Show all posts
Showing posts with label Fianna Fail. Show all posts
Saturday, April 24, 2010
Monday, March 15, 2010
Frank Fahey sees Shell to the sea shore
Well, we started off with The Atlantic Dawn controvosy where our Frank generously provided temporary licences to this http://weblog.greenpeace.org/oceandefenders/archive/2006/04/mauritania_ship_from_hell.html until it could swap with its sister ship the Veronica. Next we moved on to the the Lost at Sea saga, where the bold Frank patently favoured his constituents over other deserving causes, much to the annoyance of his department and the then attorney general. This process is now causing a rift between the government parties and the Ombudsman, with good old Danny Boyle sticking his moral oar into the thick of things again.
But, we're not finished yet. This new post is going to focus on yet another example of why Mr. Fahey is not fit for any office. It is my contention that our Frank is in the middle of a rehabilitation process with Brian Cowen. Regularly sent out to bat for NAMA, Frank '40 gaffs' Fahey http://www.businessandfinance.ie/blog_post.jsp?blogID=15&a=2653 is now embroiled in a stand-off between the government parties and the Ombudsman. Why on earth are FF and the Greens preventing the Ombudsman from getting a fair hearing and closing ranks around Fahey, particularly when you consider that Sargent and Fahey have had a hate/hate relationship over the years? Let's ramp up the pressure still further and examine another classic example of how we associate the word 'stroke' with Frank Fahey.
As with all stories, it's important to start at the beginning. The Corrib Gas Field was discovered in 1996, our first commercial gas discovery since the Kinsale Field in 1973. For a resource free country like ourselves, a very important find. The licence for the exploration of the field was granted in 1993, over a period of 11 years. The licence was given to Enterprise Oil and its partners. After the Shell bought out Enterprise Oil in 2002, the breakdown of the consortium is as follows; Shell (operator) (45%), Statoil (36,5%) and Marathon (now Vermilion) (18,5%).
The timing of this is important, because in 1975, Labour minister Justin Keating gave the state a 50% stake plus royalties of 6 to 7% in any commercial find. In 1985, Ray Burke, the corrupt FF minister, abandoned the stake and the royalties. In 1992, Bertie Ahern, the then finance minister, now currently under scrutiny with the Mahon Tribunal, reduced the tax rate applicable to the oil companies by 25% under intense lobbying from the oil companies. Not only that, but the companies were allowed to deduct tax against commercial costs over the previous 25 years.
In fairness to Ahern and Burke, the fact is that we are not a resource rich country, and therefore companies need to be given as many incentives as possible. Notwithstanding that, we have to deal with the facts that the Corrib Gas Field presents us with, and that is its current worth is anywhere between €9.5b and €22b, and our tax take from the profits is the lowest in any equivalent country in the world, money that we desperately require in our current extremis.
So back to 1996, and the consortium are sitting pretty with their multi-billion Euro and practically tax-free find, but with the rather major issue on how they were going to connect their find to the Bord Gáis network on the mainland. In order to connect to the network, the gas needs to be refined first. This can either be done offshore or onshore. Offshore is certainly rather expensive, millions of Euro more expensive than refining onshore.
Lucky for the consortium that they found a willing collaborator in Frank Fahey. As minster of state for the marine and natural resources, he was heavily lobbied by Enterprise Oil executive, John McGoldrick, resulting in the following concessions.
1. He introduced orders allowing acquisition of lands for the gas pipeline.
2. He granted the foreshore license allowing the consortium to land the pipeline.
3. He oversaw the sale of 400 acres of land from Coillte to the consortium to allow the construction of the refinery.
The acquisition of lands: For the first time in the history of this state, Compulsory Acquisition Orders were being used as a direct benefit to a company or conglomerate, rather than the State itself.
The foreshore license: This was granted in 2002 just before the General Election. It enabled the pipeline to be built within 70m of the inhabitants houses.
The Coillte sell-off: Here is Coillte's perspective on land sales:
Nothing there to indicate sales to international conglomerates for massive refining projects.
All of which results in the delay of the pipeline and the introduction of Corrib Gas into the Irish network. It has also resulted in the cost to the State of millions of Euro in maintaining the Gardaí presence in Bellanaboy, the jailing of local inhabitants (justified or not), and negative headlines all over the world.
The man responsible for all this is Frank Fahey. Mr Fahey could easily have insisted on Shell refining the gas at sea, an option more expensive, but without all the added controversy. Instead Mr Fahey actively went out of his way to aid and assist Shell and its other consortium partners for no discernible reason whatsoever.
Mr Fahey is not interested in local people (not unless they are his constituents of course), he is not interested in the environment (hence Trevor Sargent's previous savaging of him), he is only interested in an obscure patronage that no one can define in any reasonable terminology.
This is the land of politicians, and Frank Fahey is at the bottom of them.
But, we're not finished yet. This new post is going to focus on yet another example of why Mr. Fahey is not fit for any office. It is my contention that our Frank is in the middle of a rehabilitation process with Brian Cowen. Regularly sent out to bat for NAMA, Frank '40 gaffs' Fahey http://www.businessandfinance.ie/blog_post.jsp?blogID=15&a=2653 is now embroiled in a stand-off between the government parties and the Ombudsman. Why on earth are FF and the Greens preventing the Ombudsman from getting a fair hearing and closing ranks around Fahey, particularly when you consider that Sargent and Fahey have had a hate/hate relationship over the years? Let's ramp up the pressure still further and examine another classic example of how we associate the word 'stroke' with Frank Fahey.
As with all stories, it's important to start at the beginning. The Corrib Gas Field was discovered in 1996, our first commercial gas discovery since the Kinsale Field in 1973. For a resource free country like ourselves, a very important find. The licence for the exploration of the field was granted in 1993, over a period of 11 years. The licence was given to Enterprise Oil and its partners. After the Shell bought out Enterprise Oil in 2002, the breakdown of the consortium is as follows; Shell (operator) (45%), Statoil (36,5%) and Marathon (now Vermilion) (18,5%).
The timing of this is important, because in 1975, Labour minister Justin Keating gave the state a 50% stake plus royalties of 6 to 7% in any commercial find. In 1985, Ray Burke, the corrupt FF minister, abandoned the stake and the royalties. In 1992, Bertie Ahern, the then finance minister, now currently under scrutiny with the Mahon Tribunal, reduced the tax rate applicable to the oil companies by 25% under intense lobbying from the oil companies. Not only that, but the companies were allowed to deduct tax against commercial costs over the previous 25 years.
In fairness to Ahern and Burke, the fact is that we are not a resource rich country, and therefore companies need to be given as many incentives as possible. Notwithstanding that, we have to deal with the facts that the Corrib Gas Field presents us with, and that is its current worth is anywhere between €9.5b and €22b, and our tax take from the profits is the lowest in any equivalent country in the world, money that we desperately require in our current extremis.
So back to 1996, and the consortium are sitting pretty with their multi-billion Euro and practically tax-free find, but with the rather major issue on how they were going to connect their find to the Bord Gáis network on the mainland. In order to connect to the network, the gas needs to be refined first. This can either be done offshore or onshore. Offshore is certainly rather expensive, millions of Euro more expensive than refining onshore.
Lucky for the consortium that they found a willing collaborator in Frank Fahey. As minster of state for the marine and natural resources, he was heavily lobbied by Enterprise Oil executive, John McGoldrick, resulting in the following concessions.
1. He introduced orders allowing acquisition of lands for the gas pipeline.
2. He granted the foreshore license allowing the consortium to land the pipeline.
3. He oversaw the sale of 400 acres of land from Coillte to the consortium to allow the construction of the refinery.
The acquisition of lands: For the first time in the history of this state, Compulsory Acquisition Orders were being used as a direct benefit to a company or conglomerate, rather than the State itself.
The foreshore license: This was granted in 2002 just before the General Election. It enabled the pipeline to be built within 70m of the inhabitants houses.
The Coillte sell-off: Here is Coillte's perspective on land sales:
Coillte owns an estate of 445,421 hectares, which is distributed widely around the country. Coillte's practice is to sell, lease or develop a limited area of non-strategic land, for purposes other than forestry. Most sales are made in response to local demand and typically comprise house sites, isolated dwelling houses, sections of recently acquired farms, small outlying forest properties and gravel pits. [B]Land may also be sold to local authorities for infrastructure projects and for industrial or tourism projects[/B]. Properties sold are those considered not to be of strategic importance to the company's forest business, and properties whose sale would not adversely impact on plans for future management of forests and where value exceeds forest value. A Signing Off Committee within Coillte considers all land sales, with larger sales requiring approval from Coillte's Board of Directors.
Nothing there to indicate sales to international conglomerates for massive refining projects.
In 2009, An Bord Pleanala objected to the current location of the pipeline as reported in the Irish Times:
Bord Pleanála says that up to half of the proposed nine kilometre onshore route for the Corrib gas pipeline is "unacceptable" on safety grounds, due to proximity to housing in Rossport and Glengad.
The board has suggested that Shell E&P Ireland and its Corrib gas partners explore another route, up the Sruwaddacon estuary, and has given the company three months to come back with detailed information on the route, design and safety of the high pressure pipe.
In a four page letter issued today, the board says that the current application "does not present a complete, transparent and adequate demonstration" that the high pressure pipeline "does not pose an unacceptable risk to the public.
It also says that the impact of construction on a designated rural area in Rossport would "seriously injure residential amenities" and the development potential of lands there. It notes that part of the pipeline route onshore was omitted from the application.
Shell E&P Ireland has until February 5th, 2010 to respond to a series of points raised by the board, which represents a significant setback for the project's time schedule.
All of which results in the delay of the pipeline and the introduction of Corrib Gas into the Irish network. It has also resulted in the cost to the State of millions of Euro in maintaining the Gardaí presence in Bellanaboy, the jailing of local inhabitants (justified or not), and negative headlines all over the world.
The man responsible for all this is Frank Fahey. Mr Fahey could easily have insisted on Shell refining the gas at sea, an option more expensive, but without all the added controversy. Instead Mr Fahey actively went out of his way to aid and assist Shell and its other consortium partners for no discernible reason whatsoever.
Mr Fahey is not interested in local people (not unless they are his constituents of course), he is not interested in the environment (hence Trevor Sargent's previous savaging of him), he is only interested in an obscure patronage that no one can define in any reasonable terminology.
Mikhail Gorbachev -- "What is the difference between a statesman and a politician?... A statesman does what he believes is best for his country."
This is the land of politicians, and Frank Fahey is at the bottom of them.
Wednesday, February 24, 2010
Trevor Sargent - end of the government? maybe not.....
So here we are in full flow on politics.ie......
http://www.politics.ie/green-party/124396-trevor-sargent-hot-water-over-headed-notepaper-letter-garda.html
Mixed feelings here. As a previous lifelong Green supporter I've never forgiven him for going into government with FF even if he did the 'honourable' thing in resigning as leader. You see, most of the Green candates were elected on transfers from FG, Labour, SF and independent voters, if we'd seriously thought for a minute that the Greens would support the mercenaries of corruption, none of them would have been elected.
I can't help but feel however, that Sargent's attempt to influence the prosecution of the individual involved was well intentioned, out of what he and I would perceive as being a social injustice. He can't argue that he had no choice but to resign, but I actually sympathise with his position and I'm sorry that it has come to this.
How has it come to this?
The toxic horror that is the FF party is making a mockery of the Greens and everything they have previously stood for. Any Green who honestly thinks that the leaking of the letters to The Herald (of all papers - laughable) is a pure coincidence only needs to read the history books on previous FF coalitions.
This isn't funny, it's not sad, it's not a moral history lesson, it's not a parable for our children........it's a cruel, sick parody of a party that used to have a meaning and a purpose.
Of course, the main interest in this is who leaked the letters to the Evening Herald. As usual, the knee-jerk reaction was that it sounded exactly like a FF stunt.
The individual involved in the leak knows that their career, whatever their profession, is finished if their identity becomes known. Why therefore, take such a risk, particularly as the you can be certain that senior Gardaí, stung by O'Dea's accusation, will very much want to get to the bottom of this and proceed with a prosecution if applicable.
Said individual will know that as long as his identity remains intact, the suspicion of any rational person will assume that they are connected with FF.
Releasing the letters to the Evening Herald is bizarre. This would indicate that the paper was chosen because the indvidual has an acquaintance in the paper or has had some previous dealings with individual(s) in that rag.
Conclusion therefore: individual involved, angered by what had happened to O'Dea and having access to the letters - possibly from some months ago - uses the easiest and most direct option to release them.
I believe that the individual will be connected loosely to FF, I believe their identity will be known within the week, and happily, I believe the government will fall as a consequence.
O'Dea was grotesque in his actions
It's unbelievable that Sargent was be so foolish as to write those letters
The connection with the leaker will be bizarre
And the fall out for both parties will be unprecedented
Until one of the posters, lostexpectation, came up with a very plausible explanation:
Now this makes sense, it's also possible that someone with access to the letters (or copies of them) related to the constituent might have passed them on to the Gardaí. And the reasoning behind accepting this explanation goes as follows:
1. It ties in with the time line of the case
2. It explains why it was released to the Evening Herald
3. It gets around the issue as to why someone in FF would leak the letters cognisant of the allegations that would arise
4. It explains why Cowen would appear confident enough to deny the allegations
So at the moment, while I want it to be FF behind the leak or more likely someone loosely connected to FF, I'm afraid the probability is somewhat more mundane.
http://www.politics.ie/green-party/124396-trevor-sargent-hot-water-over-headed-notepaper-letter-garda.html
Mixed feelings here. As a previous lifelong Green supporter I've never forgiven him for going into government with FF even if he did the 'honourable' thing in resigning as leader. You see, most of the Green candates were elected on transfers from FG, Labour, SF and independent voters, if we'd seriously thought for a minute that the Greens would support the mercenaries of corruption, none of them would have been elected.
I can't help but feel however, that Sargent's attempt to influence the prosecution of the individual involved was well intentioned, out of what he and I would perceive as being a social injustice. He can't argue that he had no choice but to resign, but I actually sympathise with his position and I'm sorry that it has come to this.
How has it come to this?
The toxic horror that is the FF party is making a mockery of the Greens and everything they have previously stood for. Any Green who honestly thinks that the leaking of the letters to The Herald (of all papers - laughable) is a pure coincidence only needs to read the history books on previous FF coalitions.
This isn't funny, it's not sad, it's not a moral history lesson, it's not a parable for our children........it's a cruel, sick parody of a party that used to have a meaning and a purpose.
Of course, the main interest in this is who leaked the letters to the Evening Herald. As usual, the knee-jerk reaction was that it sounded exactly like a FF stunt.
The individual involved in the leak knows that their career, whatever their profession, is finished if their identity becomes known. Why therefore, take such a risk, particularly as the you can be certain that senior Gardaí, stung by O'Dea's accusation, will very much want to get to the bottom of this and proceed with a prosecution if applicable.
Said individual will know that as long as his identity remains intact, the suspicion of any rational person will assume that they are connected with FF.
Releasing the letters to the Evening Herald is bizarre. This would indicate that the paper was chosen because the indvidual has an acquaintance in the paper or has had some previous dealings with individual(s) in that rag.
Conclusion therefore: individual involved, angered by what had happened to O'Dea and having access to the letters - possibly from some months ago - uses the easiest and most direct option to release them.
I believe that the individual will be connected loosely to FF, I believe their identity will be known within the week, and happily, I believe the government will fall as a consequence.
O'Dea was grotesque in his actions
It's unbelievable that Sargent was be so foolish as to write those letters
The connection with the leaker will be bizarre
And the fall out for both parties will be unprecedented
Until one of the posters, lostexpectation, came up with a very plausible explanation:
could the journalist not have gotten the letter from the guy trevor tried to help, he obviously felt hard done by and had been trying to raise the matter anywhere he could, think, "contentiousness neighbour prosecuted after suffering assault!!", "you can't reprimand kids because you're afraid of the parents" but then the journalist saw another story and waiting till the case was over last week and went with the sargeant angle
Now this makes sense, it's also possible that someone with access to the letters (or copies of them) related to the constituent might have passed them on to the Gardaí. And the reasoning behind accepting this explanation goes as follows:
1. It ties in with the time line of the case
2. It explains why it was released to the Evening Herald
3. It gets around the issue as to why someone in FF would leak the letters cognisant of the allegations that would arise
4. It explains why Cowen would appear confident enough to deny the allegations
So at the moment, while I want it to be FF behind the leak or more likely someone loosely connected to FF, I'm afraid the probability is somewhat more mundane.
Thursday, February 4, 2010
Frank Fahy is Lost at Sea
What's it all about? Well, in the year 2000, Frank Fahy, TD, landlord and property magnet, brought about a very short term compensation vehicle known as 'The Lost at Sea Scheme'. It functioned from June 2001 to 31st December 2001. The purpose of the scheme was to offer compensation in respect to any vessels lost at sea from 1980 to 1990 before the fishing boat registry came into being.
Specifically, this compensation was to be given to fishing families unable, for financial or related reasons, to continue with their tradition.
Seems reasonable? Hmm. There were 67 applicants for compensation, and only 6 were deemed to qualify for compensation. 2 of these happened to be constituents of Mr Fahy. It then transpires that of the €2.8m compensation paid, 75% of this money went to these same two constituents. Not only that, but Mr Fahy consulted with these two individuals 4 months before the launch of the scheme, and, wrote a letter two months before the scheme ended congratulating these same two constituents about the success of their application.
All of which was unlikely to have gone noticed except that 6 parties then complained to the Ombudsman regarding their lack of success in receiving compensation. 5 of these the Ombudsman did not uphold, but in the case of the sixth, the Byrne family, who lost a father, a brother and two other crew with the loss of the Skifjord in 1981, she agreed that €250,000 worth of compensation because the scheme was fatally flawed.
An interesting transcript of Dáil questions here:
http://www.kildarestreet.com/debate/?id=2009-10-15.343.10
Has Tom Sheahan (FG, Kerry South) saying:
As the Ombudsman has been unable to reach agreement with the Department of Agriculture and Fisheries, she has decided to refer to the Oireachtas, for only the second time since the office was founded in the 1980's.
http://www.irishtimes.com/newspaper/ireland/2010/0204/1224263735064.html
It can be argued that the Ombudsman's findings are incorrect as the Byrne's processed their claim outside of the terms of conditions of the scheme, but what can't be refuted, is that the scheme itself was fundamentally flawed and designed in part to favour and benefit the then minister's constituents.
Specifically, this compensation was to be given to fishing families unable, for financial or related reasons, to continue with their tradition.
Seems reasonable? Hmm. There were 67 applicants for compensation, and only 6 were deemed to qualify for compensation. 2 of these happened to be constituents of Mr Fahy. It then transpires that of the €2.8m compensation paid, 75% of this money went to these same two constituents. Not only that, but Mr Fahy consulted with these two individuals 4 months before the launch of the scheme, and, wrote a letter two months before the scheme ended congratulating these same two constituents about the success of their application.
All of which was unlikely to have gone noticed except that 6 parties then complained to the Ombudsman regarding their lack of success in receiving compensation. 5 of these the Ombudsman did not uphold, but in the case of the sixth, the Byrne family, who lost a father, a brother and two other crew with the loss of the Skifjord in 1981, she agreed that €250,000 worth of compensation because the scheme was fatally flawed.
The design of the scheme and the manner in which it was advertised were contrary to fair and sound administration and that these shortcomings were factors in the Byrne family not qualifying for assistance under the scheme.http://www.irishtimes.com/newspaper/breaking/2009/1214/breaking49.htm
Weaknesses in the design process included a lack of adequate research of files held within the department regarding vessels lost at sea during the relevant period, lack of documented analysis of the pros and cons of the Scheme’s qualifying criteria and a failure to include provision for the exercise of discretion in the vetting of applications
(Advertising of the scheme) should have been more thorough, comprehensive and targeted ...some prospective applicants were put in a more advantageous position than others as they were written to directly by the department and the minister to inform then about the Scheme when it was launched.
An interesting transcript of Dáil questions here:
http://www.kildarestreet.com/debate/?id=2009-10-15.343.10
Has Tom Sheahan (FG, Kerry South) saying:
It was the way it was worked. Four months before the scheme was launched the then Minister met with the two applicants and told them to apply. The closing date for the scheme was December 2001 yet the Minister wrote to the two applicants in October 2001 and congratulated them. Thereafter, the Attorney General’s advice was that they had to receive this settlement because of the Minister’s letter. This was a con job and a set-up. I ask the Minister of State, Deputy Sargent, while he is present, if he still believes this con job is worthy of a complaint to the Standards in Public Office Commission.
As the Ombudsman has been unable to reach agreement with the Department of Agriculture and Fisheries, she has decided to refer to the Oireachtas, for only the second time since the office was founded in the 1980's.
http://www.irishtimes.com/newspaper/ireland/2010/0204/1224263735064.html
It can be argued that the Ombudsman's findings are incorrect as the Byrne's processed their claim outside of the terms of conditions of the scheme, but what can't be refuted, is that the scheme itself was fundamentally flawed and designed in part to favour and benefit the then minister's constituents.
Friday, January 22, 2010
Martin Cullen
I have a very strong disregard of Martin Cullen, at best he a classic example of an underachieving gombeen promoted above his station purely in his ability to garner votes in his own constituency.
He is a perfect example of what is wrong with this country where ability, competence and morals come way down the list in terms of boxes governments tick when they are looking for ministers.
In addition, his comments comparing his treatment to that of a rape victim were crass. I'm not sure if the speech was impromptu or rehearsed. If the latter, then clearly this ties in with my remarks above.
However, I do find myself in agreement that certain sections of the media, in particularly the 'Irish' Mail, were obsessed in their hounding of Cullen with regard to a perceived affair and favouritism shown to Monica Leech. His statement that his children were on the receiving end of bullying and had to move schools has a ring of truth to it.
Regardless of his ineptitude, nobody deserves to have their family subjected to that abuse if the source for which is media driven. He is relatively unique as a FF minister in being the subject of intense media intrusion, resulting in what appeared to be slander and lies. Cullen deserves our ridicule and bile based on his performance as a minister, but no more than that.
Wednesday, March 4, 2009
The Irish economy
We're in pretty big trouble here. There's so much crap flying around it's difficult to isolate the issues. Broadly speaking there are two main problems, a spin off problem based on the first two, and a solution that resolves one but not both.
Problem #1. The Bank Crisis.
So our banks are the same as everybody else's. While we were not effected by the sub-prime problems in the States nor the kind of corporate greed of credit default swaps, we just had greedy bankers giving away truckloads of borrowed cash to an increasingly heated property market.
You can't blame the government for this with one exception, regulation. Who regulates the regulator? When you consider that outside agencies such as The New York Times were pointing the finger at Ireland's lack of fiscal governance, you'd think someone up high would take an interest in it.
The most damning thing is potentially still out there. From what I can see it appears our ex-financial regulator, civil servants within the Central Bank, and certain Irish banks like IL&P and Anglo-Irish actively colluded together to lie to the Stock exchange, outside investors, and the Irish people.
So either someone in the government was aware of this and should be sacked, or else nobody was aware of it and so were therefore merely stupid and incompetent. As you may be aware, being stupid and incompetent is not a sackable offence in this country, just look at our current Tanaiste, Mary Coughlan.
Problem #2 The balance of payments.
Look guys, what goes up must come down. I don't think any country in the world that has gone through a property boom where prices doubled or tripled hasn't gotten away with the fabled 'soft landing'. The prices will always crash.
For the last 12 years we have had a government with Plan A. Make revenue from property sales. Plan B was when people sold their house and made lots of money they would buy nice new shiny 4X4's and give themselves lots of nice things they really didn't need. So the government had the VAT and VRT revenues lining their pockets.
Plan C was to give most of this money away in tax cuts (so they would get elected) and tax breaks for the wealthy, or at least those of us who could afford accountants.
Plan D was to create lots of jobs in the public sector and pay them whatever they wanted and under any terms and conditions, without any benchmarking on trivial things like skill, ability and value for money.
Because there's no tomorrow is there?
So now we have a situation where the government have to borrow €55m every day just to keep the show going because they, and they alone, have wasted the opportunity to make us into a fiscally responsible country like say Germany.
I've yet to hear anyone from the government apologise for ruining our economy. When you consider that our current Taoiseach was the minister for finance for 4 of the more recent years, the buck has to stop there.
It's said that you get the government you deserve. Are the Irish that bad a people?
Problem #3 The spin off
There are two organisations that give countries and financial institutions credit ratings by their clinical and expert perspectives. One is Moody's and the other is Standard & Poors. As it stands at the moment, they consider us to be the riskiest country in the EU zone to give credit to.
That means we're riskier to lend money to than Spain, Italy, Portugal and Greece. No offence to Greeks but your country is a basket case, and apparently we're worse. Being riskier means it costs more money to borrow and the cost of insuring that money is higher too.
Why is this? Well it's a combination of problems #1 & #2. But critically, it's also a commentary on how the government are handling the crisis and how much confidence they have in our banking and regulation system.
Yes, we're that bad. Don't take my word for it, take the word of the market. And as we've seen over the last few months, time and time again the government have been wrong, and the market has been right.
The solution. But only for one
We had a finance minister who some time ago thought it would be a good idea to save a bit of money for a rainy day. His name was Charlie McCreevy. He was exiled from Minister for Finance to EU Commissioner some time ago to be replaced by the wonderfully short sighted Brian Cowan.
Charlie, and I'm not a fan as he's as much to blame as Mr Cowan, decided to put away and invest 1% of GDP every year. This fund was worth (even after a woeful year in investments) about €20 billion at the end of 2008. This, and only this, is keeping our heads above water.
In itself it would be enough to resolve our banking crisis. In itself it would be enough to reduce the chronic tax burden and enormous cuts we are going to experience over the next 4-5 years.
But it can't do both.
It just shows what could and should have been done over the last 12 years.
There's no point saying that we're learning from our mistakes, these kind of errors only happen once a century.
So that's it, we're screwed.
Thanks Fianna Fail.
Problem #1. The Bank Crisis.
So our banks are the same as everybody else's. While we were not effected by the sub-prime problems in the States nor the kind of corporate greed of credit default swaps, we just had greedy bankers giving away truckloads of borrowed cash to an increasingly heated property market.
You can't blame the government for this with one exception, regulation. Who regulates the regulator? When you consider that outside agencies such as The New York Times were pointing the finger at Ireland's lack of fiscal governance, you'd think someone up high would take an interest in it.
The most damning thing is potentially still out there. From what I can see it appears our ex-financial regulator, civil servants within the Central Bank, and certain Irish banks like IL&P and Anglo-Irish actively colluded together to lie to the Stock exchange, outside investors, and the Irish people.
So either someone in the government was aware of this and should be sacked, or else nobody was aware of it and so were therefore merely stupid and incompetent. As you may be aware, being stupid and incompetent is not a sackable offence in this country, just look at our current Tanaiste, Mary Coughlan.
Problem #2 The balance of payments.
Look guys, what goes up must come down. I don't think any country in the world that has gone through a property boom where prices doubled or tripled hasn't gotten away with the fabled 'soft landing'. The prices will always crash.
For the last 12 years we have had a government with Plan A. Make revenue from property sales. Plan B was when people sold their house and made lots of money they would buy nice new shiny 4X4's and give themselves lots of nice things they really didn't need. So the government had the VAT and VRT revenues lining their pockets.
Plan C was to give most of this money away in tax cuts (so they would get elected) and tax breaks for the wealthy, or at least those of us who could afford accountants.
Plan D was to create lots of jobs in the public sector and pay them whatever they wanted and under any terms and conditions, without any benchmarking on trivial things like skill, ability and value for money.
Because there's no tomorrow is there?
So now we have a situation where the government have to borrow €55m every day just to keep the show going because they, and they alone, have wasted the opportunity to make us into a fiscally responsible country like say Germany.
I've yet to hear anyone from the government apologise for ruining our economy. When you consider that our current Taoiseach was the minister for finance for 4 of the more recent years, the buck has to stop there.
It's said that you get the government you deserve. Are the Irish that bad a people?
Problem #3 The spin off
There are two organisations that give countries and financial institutions credit ratings by their clinical and expert perspectives. One is Moody's and the other is Standard & Poors. As it stands at the moment, they consider us to be the riskiest country in the EU zone to give credit to.
That means we're riskier to lend money to than Spain, Italy, Portugal and Greece. No offence to Greeks but your country is a basket case, and apparently we're worse. Being riskier means it costs more money to borrow and the cost of insuring that money is higher too.
Why is this? Well it's a combination of problems #1 & #2. But critically, it's also a commentary on how the government are handling the crisis and how much confidence they have in our banking and regulation system.
Yes, we're that bad. Don't take my word for it, take the word of the market. And as we've seen over the last few months, time and time again the government have been wrong, and the market has been right.
The solution. But only for one
We had a finance minister who some time ago thought it would be a good idea to save a bit of money for a rainy day. His name was Charlie McCreevy. He was exiled from Minister for Finance to EU Commissioner some time ago to be replaced by the wonderfully short sighted Brian Cowan.
Charlie, and I'm not a fan as he's as much to blame as Mr Cowan, decided to put away and invest 1% of GDP every year. This fund was worth (even after a woeful year in investments) about €20 billion at the end of 2008. This, and only this, is keeping our heads above water.
In itself it would be enough to resolve our banking crisis. In itself it would be enough to reduce the chronic tax burden and enormous cuts we are going to experience over the next 4-5 years.
But it can't do both.
It just shows what could and should have been done over the last 12 years.
There's no point saying that we're learning from our mistakes, these kind of errors only happen once a century.
So that's it, we're screwed.
Thanks Fianna Fail.
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