Neo-NAMAs, who made from the Bunker?

NAMA. Good Bank, Bad Banks, Piggy Banks... the core of the debate for months has not been about finance or economics or what is LTEV. It has been about trust and who do you believe. Any idea from FF, FG, Labour, 41 Economists, Dermot Desmond or Garret Fitz has holes in it, and will have risks and all will have winners and losers from 'the known unknowns etc'. The future for Ireland is not in what comes out of NAMA or if it fails what replaces it. The future for Ireland is how we behave in all manners of life, business, public life, how we view and value others. We get the Government we deserve and we got the mess we deserve. Only and idiot who went through the last 10 years thought any good would come of this. NAMA, or what ever happens can only have one function. It is used to draw a line in the sand of how we as a nation and economy operate, unless that changes we have no future.

Here come the solders of Christ

There is that old saying that must un-Christian thing imaginable is two Jesuits alone in a room together. Well we got Brian Lenehan (Belvedere) and Eamon Ryan (Gonzaga) apparently best buds and going to get NAMA through Greens and FF Mucksavages.  This makes the unholy alliance of Goldman Sachs cronies between the Fed, Treasury and White House as chicken pooh.

Fight the Power

Shaken and Stirred - Lenehan's London cocktail circuit

Just got to read in the Irish Times how the Investment Bankers in London are impressed by Brian Lenehan and his plan for Ireland Inc etc.... But arn't these the same guys who got us into this mess? The mess we got into from bankers wanting deals and 'returns' to book to the bonds packaged into whatever your having yourself. Back then they didn't care if the bonds ever made returns, as they were for selling not for buying (duh!). But now bonds are meant to be for buying (huh?), and bankers don't care what Lenehan and ZANU FF will do to Ireland just as long as we make the payments. Its a bit like pitching up at an AA meeting to ask advice on a new cocktail you have made. After 10 minutes of explaining to ingredients and mixing the answer comes back. 'Just double the booze'.

Why we need a Latin American Economic Model for Ireland

Last Friday in Cork Brian Cowen said to the FF faithful "I'm putting the next generation ahead of the next general election.", its a shame he didn't have that brainwave 5 years ago when he was Minister of Finance, and put this idea across the cabinet table when Charlie McG was spreading the FF love like a dose of the clap in a Rio brothel! One is getting a little tired of FF breast beating! 

Now today SIPTU president Jack O'Connor has warned that the union will engage in a sustained industrial campaign if agreement cannot be reached on a new national recovery programme.

Which brings me to the successfully proven Latin American Economic Model.

1. You roll the tanks into town

2. Shoot the politicans

3. Hang the trade unionists

4. Put some guy with shades, a well fitting uniform, a chest a medals on all the stamps

5. Make sure the football stadium is ready for the kick-off of the league

With the Soccer team having a sniff at getting to the World Cup, is it any wonder that the army has been sent to Chad (I've seen the pictures and they are all wearing shades!)

FF's legacy

They took us to the land of plenty and back and left us with nothing.

Whose got a round head?

Someone in the Dail the other month said that the Banks had done more damage to Ireland than Cromwell! It would appear that Fianna Fail have risen to the challenge and are doing their damn best to top the bible thumper in slaying all that we have to offer! And how? By sitting on their hands. Now that is some card trick.

The great irony being that Cromwell didn't like royalty and was a keen republican. Whereas FF like a good aristocracy, and place the offspring of the fallen on the throne (ticket) to carry on the cause. This would have you think are we in this position because of bad genes or bad luck?

Extreme Toxic Banking Solutions, part 1

We've been here before in history when people have borrowed to much and can't pay it back. Two solutions.

1307, King Philip IV of France owed The Poor Fellow-Soldiers of Christ and of the Temple of Solomon aka the Knights Templar are large sum of cash and tortured them into false confessions and had them burned at the stake! A very popular solution to banking even back then.

In 1492 King Ferdinand and Queen Isabella of Spain had maxed out their Credit Cards riding the Moors of Spain, so expelled their bankers from the country.

Extreme, heavy handed, draconian, but perhaps  something better than what is being suggested at present. And a question to ask? If setting up a toxic bank (asset agency etc) is such a smart idea, why hasn't anyone done it yet?

L plates and high insurance for the Irish economy

Everyone is getting a pay cut these days, public or private. The government is paying consultancy companies 8% less as of today's edict. Taxes go up in a month or two after April's Budget. Thankfully interest rates are going down and if you are lucky Higher Tax+Lower Wages = Lower interest rates, and you can still tread water. But the tub is draining. The Government keeps talking of a plan and action to be delivered in the future, but in the present the economy is slowly going into paralysis watching Government knee-jerk reactions. No one knows their future costs, or their future incomes, personal or as a business, thus no one can plan or react in both the public and private sector. We just wait on the shore as the tide rushes out.

The global economy will turn, and Trichet hints we may be near the bottom. On the way up two things will happen. Oil will rise and interest rates will go up. Will our incomes be rising when the Global markets recover? Yeah right, we hope, but expect not. When the twin torpedoes of high oil and high interest rates hit the already floundering SS Erin, we all go down the sink hole, because the earlier sum comes a big fat negative.

And that is why our cost of sovereign debt is about to go up, because the Minister of Finance is learning to drive in our car.

I don't think you're ready yet for the toxic bank. 

Would the Real GDP please stand up

GDP is going down like rat down a drain (censor stopped the previous analogy as I am writing before the watershed). There is nothing to worry about, its not negative, its just a correction. Either that or its very modest assessment. Housing stock is part of the 'I' of 'gross investment' within 'inventory' as a component in the complex formula GDP = C + I + G + (X-M), which is designed to be short to allow Minister's of Finance the time to read it. If the prices of our grossly inflated houses that we all have are reducing in value, then that price ought to be reflected in the size of "I" and the final sum. Buuuuuutttttt if Dept of Finance are not 'marking to market', that is incorporating the value that our houses would get if we should flog them tomorrow, and are using the values the banks insist on keeping in their books, then "I" should actually be a whole lot smaller and this year's projected GDP contraction is another tale of economic fantasy.

I'll get on to the toxic bank thing someday soon, maybe the day you want to experiment with blow drying the hair in the bath.

Deflation, deflation, only game in town

The wife's tenant called this evening to say that the local hospital had cut her hours back and she couldn't afford the rent and was going to have to move in with her mum. Her husband works in construction, we imagine money was already tight.  We are going to offer her a cut in the rent, but I doubt it will be enough. We can afford it as we are both sufferers of PTED (Post Traumatic Eighties Disorder), we hoarded assets and married late, and thus the wife's house has had her name on it for 12 odd years. 

We have begun the race to the bottom, no plan for growth, just for expenditure reduction. Less work, less hours, less pay, less spend, little left to do. They didn't have a model for Ireland Inc for 10 years and never got a exchequer return right once, and lived with an inflation target that was reminiscent of a competition between two school boys in the showers.  Now they have no idea how their red pen financial management will lead to, but they call it a plan, we call it deflation.

Deflation and the establishment of a 'toxic bank' all at the same time? That's for another day.

Ulick McEvaddy

Old Biggles told us we are in 'an economic war this week and we need heroes to come forward and do something, sod the Geneva convention [Davos as well for not getting an invite]'. First step for Flight Left Behind Attendant McEvaddy is to lead by example and run at a machine gun nest so we can carve his name on the Cenotaph of the Celtic Tiger, beside the other MIAs of Fitzpatrick et al. Kill em all and let God sort them out, as the good old boys of the 82nd say.