The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[Billys Boots]

(1) Banks should be told that there are no staff bonuses at any level and no dividends to be paid for as long as this guarantee is in place.
(2) The premium should be fair and economic - at least of the order of 1%, or 4bn per annum. If they don't like it, then go their own way. And none of this crap about how it'll be paid "if the guarantee is called on" - what the feck is that? I'd love to insure my car on those terms. I'll just tell Royal and Sun Alliance that I'll send in a premium the minute that I have an accident. No bother at all.
(3) Recapitalisation is vital. More deposits are all very well, but the issue is potential insolvency. Banks are supposed to be lending no more than 12 times their tier one capital. Ours are now up to around 40. All external subsidiaries and holdings to be sold off, and a compulsory rights issue of shares, followed by going the market and issuing enough shares to get back to 12:1.
(4) Fire both the Financial regulator and the head of the Central Bank. Hearing Patrick Neary on prime time last week was harrowing, and he's still in denial. Get him the feck out, and replace them with the most hard ass, contrary, stickler for detail we can find in the country. If banking licences have to be threatened, then do so.
(5) All auditors who went through the books and were satisfied to sign off on performing loans, to be told that they had an option of taking another look. If this was in fact their final answer, that the state thanks them for their time but reminds them that they will do their best to fully punish any auditor who's work is subsequently proven to be sub par, as well as suing them and their company for negligence and related damages - potentially quite high in this case.
(6) The state to sit on the board of all banks covered by the guarantee. (And not to just send a yes man - this person should be able to devote real and meaningful time to this task, not just another job for the boys where somebody gets €100k for attending four meetings a year and nodding.
(7) Above all, a few public hangings of those who are showing nothing but blatant disrespect to the system, to the nation and to all who sail in her. The likes of the two lads who bought the Anglo shares the day that they bailout was agreed - I know they're going to end up taking a bath on them, but that's not the point. A fricking 18 year old would know that it was inappropriate, and that disclosure meant that they were absolutely guaranteed to be found out - they didn't care, they just did it anyway. If they are that brazen when they know they'll be found out, imagine what they'd do when they might get away with it? Imagine the corruption that goes on in the background?

Lone Shark, if you stood for election with this alone as your manifesto, I'd vote for you (and I reckon so would an awful lot of others).

[orangeman]

Shares down again today - where the f--k is the bottom

[muppet]

I've a funny feeling that Muppet might rename this thread "The Big Balls up" within the next few days...

Funnily enough I was thinking about that. Seeing as you were the first to mention it I'll give you the choice:

"The Big Balls up"

or

"The Credit c**k up"

[orangeman]

I've a funny feeling that Muppet might rename this thread "The Big Balls up" within the next few days...

Funnily enough I was thinking about that. Seeing as you were the first to mention it I'll give you the choice:

"The Big Balls up"

or

"The Credit c**k up"

The latter is better I think.

[Lone Shark]

Excellent posts and comments Lone Shark but you have me slightly wrong I think. I'm certainly not a major FF man and won't be voting that way in the near future. My comments were related to the piece I was after reading. Can you explain to me the major differences in economic philosophy between FG and FF? I don't think there are many/any. Its not the same things as "who would be the better government". Higgins was pointing out that all the parties in the Dáil have the same basic beliefs in "the market". If FG/Lab were in government for the last 10-15 year things would be more or less the same right now - would they not? They claimed that themselves around election time.

You are absolutely spot on about a lot of things but one really close to my heart is this - people not really wanting no corruption. Most do just want the inside track and fail to see the hypocrisy of complaining when things go against them.

To be honest, claims around election time from any side, government or opposition, are awful nonsense and I don't think any sane voter takes them seriously. The problem is that sane voters tend to be outnumbered by those who are in theory thinking of their pockets, but who just don't see the bigger picture.

But I take your point that you were just echoing Joe Higgins' points, so fair enough. I think I remember you and me having a debate along similar lines before which might have sparked it is all. Apologies for the misrepresentation by myself.


BB, I'm young enough to still have traces of idealism within me, but yet old enough to know that idealism of any kind is the one thing that will absolutely torpedo any chances of getting elected that one may have. I'd love to do it as a social experiment though. Not even for the purposes of getting elected - I know that would never happen. But running for election against Cowen and getting 2,000 first preferences that in turn transferred back to him would be a huge thing. That would send the message - "here's a few thousand traditional FF voters who want to send the message that the corruption has to stop". FF will only listen to what the ballot box tells them. Lately the message has been loud and clear - corruption and malpractice is a non issue for the Irish voter.

[muppet]

(1) Banks should be told that there are no staff bonuses at any level and no dividends to be paid for as long as this guarantee is in place.
(2) The premium should be fair and economic - at least of the order of 1%, or 4bn per annum. If they don't like it, then go their own way. And none of this crap about how it'll be paid "if the guarantee is called on" - what the feck is that? I'd love to insure my car on those terms. I'll just tell Royal and Sun Alliance that I'll send in a premium the minute that I have an accident. No bother at all.
(3) Recapitalisation is vital. More deposits are all very well, but the issue is potential insolvency. Banks are supposed to be lending no more than 12 times their tier one capital. Ours are now up to around 40. All external subsidiaries and holdings to be sold off, and a compulsory rights issue of shares, followed by going the market and issuing enough shares to get back to 12:1.
(4) Fire both the Financial regulator and the head of the Central Bank. Hearing Patrick Neary on prime time last week was harrowing, and he's still in denial. Get him the feck out, and replace them with the most hard ass, contrary, stickler for detail we can find in the country. If banking licences have to be threatened, then do so.
(5) All auditors who went through the books and were satisfied to sign off on performing loans, to be told that they had an option of taking another look. If this was in fact their final answer, that the state thanks them for their time but reminds them that they will do their best to fully punish any auditor who's work is subsequently proven to be sub par, as well as suing them and their company for negligence and related damages - potentially quite high in this case.
(6) The state to sit on the board of all banks covered by the guarantee. (And not to just send a yes man - this person should be able to devote real and meaningful time to this task, not just another job for the boys where somebody gets €100k for attending four meetings a year and nodding.
(7) Above all, a few public hangings of those who are showing nothing but blatant disrespect to the system, to the nation and to all who sail in her. The likes of the two lads who bought the Anglo shares the day that they bailout was agreed - I know they're going to end up taking a bath on them, but that's not the point. A fricking 18 year old would know that it was inappropriate, and that disclosure meant that they were absolutely guaranteed to be found out - they didn't care, they just did it anyway. If they are that brazen when they know they'll be found out, imagine what they'd do when they might get away with it? Imagine the corruption that goes on in the background?

Lone Shark as always you can write a post that articulates your (and lots of others) thoughts succinctly. As well as having the affect of explaining a logical line of thinking on a hopelessy complex situation it also identifies among our posters the most natural human reaction to a crisis, panic.

Zapatista wants a 10 year dictatorship while Billy would elect you based on your post. I'm not having a go at the lads but that is exactly what is happening in the market. Anything that looks good is the next big thing, until of course it isn't, and then everyone who jumped on that bandwagon is desperate to find the next true bandwagon. Even perfectly good bandwagons flounder in the stampede.

Just a few comments and I apologise for my lack of education in all things finance.

1) No problem with this.
2) Setting a premium is fair enough however banks always pass this on to the customer. That can't be allowed to happen in this case when it is that same customer who has saved the bank. The premuim must come from current or future profits.
3) Current Leveraging of the banks. That is the current crisis after the credit crunch and the liquidity shortage. Just listened to All-Ireland bandwagon jumping champion, Senator Shane Ross on the radio, saying we can never pay up on the guarantee because our national debt is €43Billion so how could we borrow €400Billion? The guarantee should be measured as a function of GDP and hypothetically if we did borrow to pay out on the guarantee we still wouldn't be leveraged as badly as some of the banks are now. That is how big a mess they are in.  If your proposals are workable in such a depressed market then I'd go for them, but I'm not sure.
4) Agree totally. I suggest Mr. Cathal Giomard. He is currently the Aviation regulator. Michael O'Leary called him a w**ker on RTE and given the extraordinary pressure, in the media, in the courts or by proxy using certain politicians, O'Leary puts on anyone who gets in his way the fact that this man hasn't flinched tells me he is the man.
5) I'd love to see this, but this is Ireland of the zero accountability.
6) Agreed but in addition the State should have some one sit on the Risk assessment committee (board or whatever) of each also.
7) This refers to a point you regularly raise here, that the Irish Stock Exchange and associated industry is a society of nods and winks. I have very limited experience of this world but let's just say it was an eye opener and I fully agree with you.

BTW one last point, and I am guilty of this also especially with regard to my hatred of the neo-Cons, but I feel that political point scoring at this time during the financial tsunami is pathetic. The blame game can come afterwards once we are in ecovery. For that reason I am disgusted with Labour's performance last week.  

[Lone Shark]

(1) Banks should be told that there are no staff bonuses at any level and no dividends to be paid for as long as this guarantee is in place.
(2) The premium should be fair and economic - at least of the order of 1%, or 4bn per annum. If they don't like it, then go their own way. And none of this crap about how it'll be paid "if the guarantee is called on" - what the feck is that? I'd love to insure my car on those terms. I'll just tell Royal and Sun Alliance that I'll send in a premium the minute that I have an accident. No bother at all.
(3) Recapitalisation is vital. More deposits are all very well, but the issue is potential insolvency. Banks are supposed to be lending no more than 12 times their tier one capital. Ours are now up to around 40. All external subsidiaries and holdings to be sold off, and a compulsory rights issue of shares, followed by going the market and issuing enough shares to get back to 12:1.
(4) Fire both the Financial regulator and the head of the Central Bank. Hearing Patrick Neary on prime time last week was harrowing, and he's still in denial. Get him the feck out, and replace them with the most hard ass, contrary, stickler for detail we can find in the country. If banking licences have to be threatened, then do so.
(5) All auditors who went through the books and were satisfied to sign off on performing loans, to be told that they had an option of taking another look. If this was in fact their final answer, that the state thanks them for their time but reminds them that they will do their best to fully punish any auditor who's work is subsequently proven to be sub par, as well as suing them and their company for negligence and related damages - potentially quite high in this case.
(6) The state to sit on the board of all banks covered by the guarantee. (And not to just send a yes man - this person should be able to devote real and meaningful time to this task, not just another job for the boys where somebody gets €100k for attending four meetings a year and nodding.
(7) Above all, a few public hangings of those who are showing nothing but blatant disrespect to the system, to the nation and to all who sail in her. The likes of the two lads who bought the Anglo shares the day that they bailout was agreed - I know they're going to end up taking a bath on them, but that's not the point. A fricking 18 year old would know that it was inappropriate, and that disclosure meant that they were absolutely guaranteed to be found out - they didn't care, they just did it anyway. If they are that brazen when they know they'll be found out, imagine what they'd do when they might get away with it? Imagine the corruption that goes on in the background?

Lone Shark as always you can write a post that articulates your (and lots of others) thoughts succinctly. As well as having the affect of explaining a logical line of thinking on a hopelessy complex situation it also identifies among our posters the most natural human reaction to a crisis, panic.

Zapatista wants a 10 year dictatorship while Billy would elect you based on your post. I'm not having a go at the lads but that is exactly what is happening in the market. Anything that looks good is the next big thing, until of course it isn't, and then everyone who jumped on that bandwagon is desperate to find the next true bandwagon. Even perfectly good bandwagons flounder in the stampede.

Just a few comments and I apologise for my lack of education in all things finance.

1) No problem with this.
2) Setting a premium is fair enough however banks always pass this on to the customer. That can't be allowed to happen in this case when it is that same customer who has saved the bank. The premuim must come from current or future profits.
3) Current Leveraging of the banks. That is the current crisis after the credit crunch and the liquidity shortage. Just listened to All-Ireland bandwagon jumping champion, Senator Shane Ross on the radio, saying we can never pay up on the guarantee because our national debt is €43Billion so how could we borrow €400Billion? The guarantee should be measured as a function of GDP and hypothetically if we did borrow to pay out on the guarantee we still wouldn't be leveraged as badly as some of the banks are now. That is how big a mess they are in.  If your proposals are workable in such a depressed market then I'd go for them, but I'm not sure.
4) Agree totally. I suggest Mr. Cathal Giomard. He is currently the Aviation regulator. Michael O'Leary called him a w**ker on RTE and given the extraordinary pressure, in the media, in the courts or by proxy using certain politicians, O'Leary puts on anyone who gets in his way the fact that this man hasn't flinched tells me he is the man.
5) I'd love to see this, but this is Ireland of the zero accountability.
6) Agreed but in addition the State should have some one sit on the Risk assessment committee (board or whatever) of each also.
7) This refers to a point you regularly raise here, that the Irish Stock Exchange and associated industry is a society of nods and winks. I have very limited experience of this world but let's just say it was an eye opener and I fully agree with you.

BTW one last point, and I am guilty of this also especially with regard to my hatred of the neo-Cons, but I feel that political point scoring at this time during the financial tsunami is pathetic. The blame game can come afterwards once we are in ecovery. For that reason I am disgusted with Labour's performance last week.  

To be honest I'm not for a minute suggesting that the government should follow my suggestions to the letter. All I'm saying is that here are a list of things that I would have liked to see to prove that this wasn't just a no strings attached gift to the banks. If I saw even two or three of them I'd be happy. Instead what I see is the country writing a promise that we can't possibly hope to honour, and no sign of the system that got us into this mess in the first place being changed at all. Even if there were other signs that weren't on my list, then fine - but there are none whatsoever.

As for the points you dispute above, just for rebuttal:

(2) In a properly run market, what should be stopping the banks from passing on these things to the customer is competition - the threat that if you take the pee with charges, I'll up sticks and go to another bank. With genuine alternatives like Rabo in the marketplace, this should be the stimulus to keep banks honest. However it is up to the regulator to (i) make sure there is no sneaky stuff - that customers know what they will be paying for BEFORE they pay it, and (ii) that there is an easy way to access a full list of the different bank's charges for different things for comparative purposes. That would do fine.
(3) My proposals are wokable, but only in the sense that the existing stock would take a hammering. However the shareholders are ultimately accountable for the direction of the banks and the head honchos every year, and they took an investment that went wrong. It's not nice, but they should be wiped out before the customer or the taxpayer has to pay a red cent. Now a lot of Irish pensions are heavily vested in the banks and that's another cosy cartel that should be sorted out, but that's another issue again.
4&6) Couldn't agree more on both counts. I should have thought of the risk assessment board aspect myself to be honest.

[Zapatista]

Zapatista wants a 10 year dictatorship while Billy would elect you based on your post.

I did say I wanted Declan to be that dictator so I obviously have it well thought through but, if Billy wants Lone Shark, I might throw my weight behind him.

[Zapatista]

Is perjury a crime?

[Main Street]

Olympics Crunched

'Taxpayers may have to fund the full cost of the £1billion Olympic village as the credit crunch scares off private investors for the 2012 Games, Olympic chiefs have admitted.'

I don't know why, maybe my humour is getting blacker than black, but I smiled when I read that.

[pintsofguinness]

What the f**k?! Gordon Brown up on a high horse on ITV news to tut and shake his head at Iceland - using terror laws to freeze Iceland assets in the UK, did I hear that right? Now they're taking legal action to get their money back?! Aye Gordon, that'll work 
He makes my blood boil 

[Pangurban]

Go for it Lone Shark, you are talking more sense than any of the politicos we have at present, North or South. Also given that the laxity and total lack of oversight by these same politicos contributed to the present mess, its frightening to have too rely on them too find a way out. One thing is sure, when all is done and dusted, little will have changed, the Bankers will be financially secure while the ordinary Joe Soap will continue the struggle to keep a Roof over his head.

[Donagh]

Just noticed that the Dow Jones closed down over 7% today and the Iseq failed to make any headway at all to make up for the crash earlier in the week. The Iseq is fooked tomorrow. 

[Bogball XV]

Oz markets dropped 5% in the first 20 mins of opening, japan hasn't opened yet, but tomorrow is looking catastrophic - BOI down badly today too - will they be first to call on guarantee?  Will it be tomorrow, if so, will anybody lend to them anyway, maybe we'll have the first nationalisation - at least the name won't have to be changed!

[stephenite]

Aussie Market in free-fall - hopefully it can stage some sort of recovery over the day but I'd be surprised. Aussie dollar down EUR.49