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

[Aerlik]

Just finished watching show on ABC here about those crooked, lying, cheating, cockroach-shit of a shower of bastards at Goldman Sachs, and what they did.

If EVER there was justification for the noose, they'd be at the top of the pile.

[seafoid]

I saw a graph in the FT showing the exposure of European banks to Irish debt. France , German and Dutch banks have exposure in excess of €200bn each.

http://www.ft.com/cms/s/3/31794cd6-7536-11df-a7e2-00144feabdc0.html

The Irish times has a great article by Paul Krugman on the dangers of deviating from Keynesian stimulus.. except that Ireland is doing to exact opposite of what he recommends..

Obvious then why the EU approved all of our guarantee/bailout/NAMA schemes especially as the tab will be picked up ultimately by the Irish taxpayer, rather than those banks.

Yeah. It is shameful. The taxpayer takes it on the chin.  I thought the government had great negotiators with experience going back to 1973 and joining the EEC. The banks walked all over them. 

[muppet]

http://www.usatoday.com/money/industries/banking/2010-06-19-bank-failure-pace-tops-2009_N.htm

Bank failure is 83rd in '10; pace more than double last year's

[Main Street]

I saw a graph in the FT showing the exposure of European banks to Irish debt. France , German and Dutch banks have exposure in excess of €200bn each.

http://www.ft.com/cms/s/3/31794cd6-7536-11df-a7e2-00144feabdc0.html

The Irish times has a great article by Paul Krugman on the dangers of deviating from Keynesian stimulus.. except that Ireland is doing to exact opposite of what he recommends..

Obvious then why the EU approved all of our guarantee/bailout/NAMA schemes especially as the tab will be picked up ultimately by the Irish taxpayer, rather than those banks.

Yeah. It is shameful. The taxpayer takes it on the chin.  I thought the government had great negotiators with experience going back to 1973 and joining the EEC. The banks walked all over them.

Are you not making an assumption that the Government's intention was to negotiate for and prioritise the interests of the citizens?
The Nama deal prioritises the interests of the Banks/lenders, that deal is totally in line with Government economic dogma.
That dogma has not actually been changed by the crash. Fundamentally they are attempting to save/resurrect a model of Economic dogma that has already sunk and known to be destructive.
It would appear that lip service from Irish political leaders is only being paid to the central causes of the crash and they are active in creating confused thinking using smoke and mirrors methods. I believe they know what they are doing and they are doing it with purpose.   

Anyway, afaiu, Kruger's basic point is that spending can be cut after the economy has shown signs of recovery.
That it is folly to cut a stimulus before the economy has shown real signs of real recovery.

[seafoid]

link to a very good presentation by Ann pettifor on the tasc blog

http://www.progressive-economy.ie/2010/06/deflation-is-no-way-to-reduce-debt.html

WTF decided that the  Keynes approach wouldn't work? And the govt just follows orders.
The next few years look like an absolute nightmare.

[seafoid]

http://www.imf.org/external/np/ms/2010/062410.htm

IMF report on Ireland

Unemployment at 9% out to 2015. The Fianna Fail/PD  freakonomics
experiment goes arseways indefinitely

[give her dixie]

Looks like the fox is looking after the hen house....


http://www.irishtimes.com/newspaper/frontpage/2010/0629/1224273558461.html

State has paid well over €17m in fees for banking crisis advice

FEES PAID by the Government and the Financial Regulator to outside consultants for advice sought since the banking crisis began in the autumn of 2008 have risen to well in excess of €17 million.

The Department of Finance has disclosed that some €1.4 million has been paid to investment bank NM Rothschild this year for financial advice on resolving the problems within the banking sector.

This brings the total sums paid by the Government to investment banks for financial advice during the banking crisis to €8.7 million.

In addition, more than €8.5 million has been paid to legal advisers Arthur Cox, accountants PricewaterhouseCoopers and estate agents Jones Lang LaSalle for advice provided to the department, the regulator and the National Treasury Management Agency (NTMA).

The NTMA, which now oversees the Government's banking strategy, paid Rothschild fees of €583,000 plus VAT of €125,400 last January and made a further payment of €583,333 plus VAT of €122,500 in April. The fees were disclosed by the department under a Freedom of Information request submitted by The Irish Times.

While the fees are paid by the NTMA, Rothschild provides advice to the department and the agency.

The money paid to Rothschild is on top of €7.3 million in fees paid to Merrill Lynch, which provided financial advice during the crisis between September 2008 and June 2009 before losing the contract to Rothschild last summer. Merrill Lynch had been hired in 2008 without the contract going out to public tender as the pace of the financial crisis forced the Government to act quickly to seek external financial advice.

In addition to fees paid for financial and banking advice, some €3.9 million was paid to Arthur Cox from September 2008 to June 2009 for consultancy work on the State bank guarantee, the nationalisation of Anglo Irish Bank and the recapitalisation of Allied Irish Banks (AIB) and Bank of Ireland.

On top of the €17 million total, the Government earmarked €3.1 million for legal advice for the remainder of 2009 and €3 million for 2010, according to a reply last September from Minister for Finance Brian Lenihan to a Dáil question tabled by Labour finance spokeswoman Joan Burton.

The regulator also paid €3.8 million to PricewaterhouseCoopers for assessing the capital requirements of the banks and €840,000 to Jones Lang LaSalle for financial and property advice.

Fees paid for wide-ranging banking advice to the Government is in addition to lucrative contracts awarded by the National Asset Management Agency (Nama) to Arthur Cox, PricewaterhouseCoopers and UK bank HSBC.

A spokesman for the department said it has admitted it lacked sufficient in-house expertise to cope with the financial crisis. He added that the National Pension Reserve Fund received "arrangement fees" of €30 million each from AIB and Bank of Ireland from last year's €7 billion recapitalisation of the two biggest banks.

[Rois]

Are these fees really a surprise?

If you look hard enough, there's a bit of upside in that a lot of the fees paid will have helped maintain jobs for Irish people in the struggling legal and professional services sector.  I imagine while undeniably lining the pockets of some of the partners in PwC, Arthur Cox etc, the volumes of work involved (of which I have some first hand experience) have created or protected jobs for young solicitors, accountants and estate valuers.  Well I did say you had to look hard!

[seafoid]

http://www.progressive-economy.ie/2010/06/no-recovery-yet-and-debt-deflation.html

Nominal GDP fell 4.4% year-on-year and is now 20.2% below its end-2007 peak. GNP fell 8.6% from a year ago and is now 27.6% below its peak. This is an Irish Depression.

If we take the components of growth the data are as follows: personal consumption is down 4.6% year-on-year, -19.6% from the peak; current govt. spending down 8.9%, -11.2% from peak, and investment remains the biggest single contributor to the slump with gross fixed capital formation falling 7.6%, -66.4% from its peak.

[Bogball XV]

Are these fees really a surprise?

If you look hard enough, there's a bit of upside in that a lot of the fees paid will have helped maintain jobs for Irish people in the struggling legal and professional services sector.  I imagine while undeniably lining the pockets of some of the partners in PwC, Arthur Cox etc, the volumes of work involved (of which I have some first hand experience) have created or protected jobs for young solicitors, accountants and estate valuers.  Well I did say you had to look hard!

Surely we could say the same about any govt expenditure, keynesian economics at its best.  The thing is, I don't believe that Rothschild are in Dublin at all, and I also seem to remember that it was Merill London who were advising, not sure on that one though.

It's been standard practice for the irish govt over the past decade (i have no knowledge of what they did prior to that) to farm out each and every decision to a 3rd party (it's called ass covering) no matter what the price.  One wonders why we bother having one of the highest paid civil services in the world for?  I think there was a report in some of the papers a few weeks ago pointing out that out of 600 odd staff in the dept of finance, 2 had degrees and none were economists?  I only heard it on the radio, so not entirely sure of the numbers, but that was the gist of it.

[muppet]

http://news.bbc.co.uk/2/hi/business/10460207.stm

Irish Republic out of recession

Unemployment grew slightly in the Irish Republic in June
The Irish Republic officially moved out of recession in the first quarter of 2010, official figures show.

The country's gross domestic product grew by 2.7% during that period on the last three months of 2009.

But the Central Statistics Office said gross national product (GNP), seen by some economists as a more accurate barometer of the economy, fell by 0.5%.

Meanwhile, those claiming unemployment benefit rose by 5,800 in June on a seasonally adjusted basis to 444,900.

That meant June's estimated unemployment rate was 13.4%.

"Realistically, sustained growth is unlikely to take hold until late next year, with continued pressure both at home and abroad," said Melanie Bowler, of Moody's Economy in London.

"We're forecasting that the eurozone will slip back into recession later this year, early next year, which will clearly have implications for the Irish economy."

The return to growth marked the first rise in Irish GDP since the fourth quarter of 2007, bringing two years of recession to an end.

[Declan]

These are the cheerleaders of fiscal restraint!!

Taxing Master cuts 'grossly excessive' legal bill by 82%

Legal fees in injury case 'revolting' in extreme | 01/07/2010

A TAXING Master who granted only €393,472 of a €2.143 million legal bill expressed his "disgust and bewilderment" at the level of costs claimed.

Taxing Master Charles Moran made his comments in a recent ruling where he granted only 18 per cent of the amount sought. He described the costs claimed as "revolting in the extreme".

He was ruling in a case involving Newbridge, Co Kildare solicitors firm, Patrick V Boland Son, and four barristers including the former attorney general Harry Whelehan SC.

The other barristers involved were Paul Gardiner SC, Dan Boland BL and Cormac McNamara BL.

"In my 15 years as Taxing Master or indeed in all my years involved in litigation, I have never encountered such grossly excessive fees being marked by learned counsel or solicitors," Mr Moran said.

"I can hardly find the words strong enough to describe my disgust and bewilderment at the level of these costs being claimed."

Mr Boland would not comment when contacted. He said the ruling is being appealed and the matter was therefore sub judice.

The case involved an injured party, Declan O'Brien, and the Personal Injuries Assessment Board (PIAB) and the fees were those charged by the team representing Mr O'Brien. In 2005 the High Court ruled that the PIAB could not deal directly with claimants who wanted to be represented by solicitors.

Mr O'Brien, of Tullamore, Co Offaly, was a meat factory worker who suffered an injury. His case was supported by the Law Society.

The PIAB appealed the case to the Supreme Court, which rejected the appeal in December 2008. Costs were granted against the PIAB and went to be taxed.

The PIAB was set up in 2004 with a view to reducing the costs of personal injuries claims. The High Court instruction fee charged by Patrick V Boland Son was reduced by Mr Moran to €86,000 from the €925,000 claimed. The Supreme Court instruction fee was reduced to €46,000 from the €100,000 claimed.

A claim for postage, photocopying, paper and other such costs, of €10,000, was reduced to €1,000.

The brief fees of €110,000 each sought by Mr Gardiner and Mr Whelehan for the High Court hearing were reduced to €25,000 each.

Lawyers for Mr O'Brien claimed his right to be represented by a solicitor was breached by PIAB's actions in seeking to deal directly with him rather than through his authorised solicitor, Denis Boland, principal of Patrick V Boland. Figures released in 2008 showed that Patrick V Boland had received fees of €16 million by then from its work representing clients in Army deafness claims.

[Zapatista]

Someone help me out please -

Is Fitzpatrick offering his State owned creditors a stake in an oil project in Nigeria?

http://www.rte.ie/business/2010/0702/fitzpatrick.html

If he is successfull would that mean that Irish tax payers would own some of the natual resourses of an African Nation?

[muppet]

Someone help me out please -

Is Fitzpatrick offering his State owned creditors a stake in an oil project in Nigeria?

http://www.rte.ie/business/2010/0702/fitzpatrick.html

If he is successfull would that mean that Irish tax payers would own some of the natual resourses of an African Nation?

It doesn't explain the nature of the 'project'. Kevin Costner's invention could be described as an oil project in the USA and it doesn't mean he owns some of its natural resources.

[muppet]

http://www.rte.ie/news/2010/0716/banks.html

Govt advised not to guarantee six banks
    Friday, 16 July 2010 14:51
Documents published by the Oireachtas Public Accounts Committee show that the Government was advised not to introduce a blanket guarantee for the six Irish banks just before it did so.

An email from financial consultants Merrill Lynch on 29 September 2008 advised the Government to introduce a secured lending scheme for the banks, under which commercial property could be exchanged for Government bonds or cash.

It said the alternative was a blanket guarantee covering all depositors and senior creditors, which would involve more than €500bn.

Merrill Lynch said this would 'almost certainly negatively impact the State's sovereign credit rating and raise issues as to its credibility'.

It added that the wider markets would be aware that Ireland could not afford to cover the full amount if required.

However, the email also states that 'there is no right or wrong answer' to the problem facing the Government.

It also claimed that apart from liquidity concerns, 'all of the Irish banks are profitable and well capitalised', but warned that liquidity for some could run out in days rather than weeks.

However, Taoiseach Brian Cowen has insisted that the bank guarantee decision was the right one, and he stood over it.

He said Merrill Lynch had put forward a range of options and the Government had to choose the best one.

Mr Cowen said there had been 'wishful thinking' on the part of the banks.

Fine Gael Finance Spokesman Michael Noonan said: 'The documents confirm that Brian Cowen and Brian Lenihan torpedoed the Irish economy through a series of catastrophic decisions.'

'Significant buffer' of assets

The documents released this morning also show the Government believed the risk to the taxpayer from its €440bn bank guarantee scheme would be offset by €500bn in assets held by the banks.

They reveal the Department of Finance told the Taoiseach that there was a 'significant buffer' of assets.

It is understood the documentation has been partially edited by the Department of Finance for reasons of Cabinet and commercial confidentiality.

Speaking on RTÉ's Morning Ireland, PAC Chairman Bernard Allen said that although the Department of Finance had not provided all of the documentation, the committee would publish everything it had received.

Former Financial Regulator Patrick Neary is reported to have informed Mr Cowen that Anglo Irish bank was in good health three days before the Government moved to rescue it.

Mr Neary is quoted in a report in today's Irish Independent as having told Mr Cowen in September 2008 that Anglo Irish Bank was not insolvent.

He is also reported to have said that the bank had enough assets to cover its debts.

Mr Neary made the statement at a meeting on 25 September 2008, which was three days before the Government's bank guarantee scheme.

He is reported to have told Mr Cowen that the bank was simply unable to continue on a current basis from a liquidity point of view.

The Government has so far put more than €14bn into the troubled bank.

Mr Neary made a similar statement about Irish Nationwide at the meeting.