Author Topic: The Big Bailout of the Eurozone? (Give us the f*cking moolah!...)  (Read 198409 times)

muppet

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Lone Shark

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3421 on: December 21, 2011, 06:28:39 AM »
Until they start rationing booze in this country we'll never raise a whimper

Gene Kerrigan: Austerity doesn't work? No problem...
Destroying Ireland to save the banks, so the banks can save the country isn't working, writes Gene Kerrigan
Sunday December 18 2011
It was a hellish year. Very little to remember fondly. Not a year we need to dwell upon. Yet, with the new year promising to be even more grim, are there lessons we might usefully remember from 2011? And what might those lessons be?

We learned, for instance, that things will be fine if we stay the course. As 2011 began, President McAleese told us she was keeping an eye out for those "green shoots of new beginnings". Later in the year, a young and rested 60, Mary headed off into the sunset, with a pension three times the salary of the average software developer.

The departing Cowen regime whooped that we were "on the road to economic recovery". Ministers of that government then retired in droves, while still relatively young, to spend more time with their vast pensions.

We learned, in short, that those who are loudest in their optimism about the current course of austerity are usually those with well-feathered nests.

We learned conclusively that the Cowen/Lenihan austerity strategy, now being implemented by Kenny/Noonan, doesn't work. This ordains that we have to destroy the country in order to save the banks, so that the banks can save the country. So, under ECB instructions, we've been feeding the bankers tens of billions; and seeking vainly to balance the books by cutting services and asset-stripping the citizens. The insane strategy of deflating an already damaged economy smothered any chance of growth. The economy contracted. Unemployment rose relentlessly.

The argument between austerity (focused on reducing deficits) and stimulus (focused on protecting jobs) has been settled. Over the past four years, austerity has turned a crisis into a catastrophe.

One of the most important lessons we learned in 2011 was this: it doesn't matter that the austerity strategy doesn't work. The Economic War Against Ourselves has the approval of the EU, the ECB, the IMF, Fine Gael, Labour, Fianna Fail and The Irish Times. This makes the strategy unimpeachably respectable and perpetually untouchable, despite its blatant failure.

You may notice that Fine Gael, Labour, Fianna Fail and The Irish Times are precisely those who cheered on the property bubble. You may notice that the EU, the ECB and the IMF benignly observed the insane gambles by German, French, UK and Irish bankers that fuelled that bubble. Among the people who matter, being repeatedly, disastrously wrong has no bad consequences.

People who oppose austerity policies are "politically motivated". The incompetent, overpaid elites who blunder onward are, on the other hand, "realists". With no political thought but peace and goodwill to all.

We learned, from the lips of ministers, that Kenny and Noonan "renegotiated" downward the profiteering interest rate we were charged for EU/IMF loans. This is simply untrue. But they continue to say it, every time they need a morale boost. Which is often.

We learned that Tim Geithner, Barack Obama's top economics guy, vetoed any suggestion that the Irish Government might demand that bank bondholders pay some of their own gambling debts.

Some weeks later, face to face with Obama, Enda Kenny chickened out of raising that matter. Face to face with Geithner, Michael Noonan also chickened out. We learned, in short, that Irish politicians are tough when they're taking money away from blind people.

We learned that politicians can be courageous and move swiftly when something matters to them. When the rules said that Richard Bruton's adviser, Ciaran Conlon, couldn't be paid more than €92,000, Bruton's boss Enda Kenny used his authority to set aside the rules and give his old mate a €35,000 rise. And then Kevin Cardiff, top lad in Finance, was rejected for a job by an EU committee. Kevin is remembered for his role in the bank guarantee, and was in charge of Finance during the €3.6bn accounting error. Politicians swarmed to his aid. Kevin was lifted into his EU job. He will get €260,000 for a job he has described as a "doddle".

We learned that democracy is dispensable. At election time, we're told to be grateful for the sacrifices that gave us the ballot. People living under dictators put their lives on the line to achieve the right to vote -- and we rightly honour them.

We learned after last February's General Election that a mandate for change is without value, when the elite collude. Promises of change are without meaning. The right to vote becomes a child's game, a trivialising simulation of democracy.

When democratically elected politicians in Italy and Greece balked at taking instructions from the ECB they were replaced by people who never received a single vote. Their successors (bankers) were chosen by unelected but extremely powerful functionaries within the ECB (bankers).

We learned that a strike of capital is not worthy of comment by politicians, academics and the austerity pundits. If bin-men withheld their labour because of an insufficient return there would be screams of "holding the country to ransom at a time of national crisis". When capital conducts an investment strike, in demand for higher returns, the otherwise garrulous have nothing to say. They instead obsess ("Crokeparkdeal!Crokeparkdeal!Crokeparkdeal!") about a minor impediment to the asset stripping.

We learned that some people can state something and then state the opposite, and retain credibility with the media. For instance, a year ago Michael Noonan fiercely condemned the FF/Green regime for throwing away tens of billions by generously paying the gambling debts of Irish, German and French bankers.

When he became minister, less than three months later, he seamlessly continued the FF/Green strategy he had denounced. This was not hypocrisy. When Noonan condemned the squandering of billions he was playing the role of a tough, angry opposition politician.

Today, Noonan has another role. He plays a shrewd, worldly-wise Minister for Finance. It's all pose, by a superb actor, but he convinces many now as he convinced many a year ago.

We learned over the past couple of weeks that it is imperative that we put the EU's "fiscal responsibility" measures into our Constitution. Noonan says we must pass such a referendum whatever the wording, or we'll be voting ourselves out of the euro. We will be no longer "at the heart of Europe" (you'll remember how voting Yes to Lisbon 2 ensured our presence within the cockles of Frau Merkel's heart?).

Some people fear that Germany wants to take control of our budgets, perhaps our economy. I don't think that's true. Something far bigger is happening.

For 30 years, a brash form of casino capitalism reigned. The old conservative capitalism (welfare state, effective regulation) had lost the argument (and anything to the left of that was old hat). Casino capitalism (markets rule, deregulate, privatise) consequently ran up trillions in debt and ruined whole countries.

Even after the failures of the past four years, with the euro collapsing, the fiscal hawks remain immovable (deficits matter, not jobs -- banks matter, not people). They want to make any further argument unconstitutional. It's a more sophisticated form of the Tea Party movement in the US, that's smothering economic recovery with "debt ceiling" laws.

Amid the ruins they have made, they hold up constitutional handcuffs and they say, "trust us".

And a happy Christmas to you, too.


While I appreciate that Kerrigan may think he's standing up for the little guy here, this is muck of the highest order. He's right in that the existing capitalist structure failed, mainly because we did what we always do - we applied it half the time. You can have free, unfettered capitalism, as long as you allow big business to fail. Just as I would say to politicians, there is nothing at all wrong with stimulating a recessionary economy by practicing counter-cyclical fiscal policy, however you can't just pick and choose that approach when you're in a recession. You also need to practice it during the boom, and nobody wanted to hear about 20m budget surpluses in the boom. The ridiculous thing is that nobody would want to hear of it if we do reach another one either.


As a self employed individual who is working for a lot less money than I did in 2008, can I simply decide that "austerity doesn't work?". Of course not. I can spend all my money by August if I want, but then winter will come in and I'm going to need money for light, heat, food, electricity, you know, living. At that point, when I'm going to other people looking for money just to live, then they're going to want to know that I can pay it back. And telling them that I'm not interested in austerity and that I plan to be broke by August again next year hardly inspires that faith.

Saving the banks in the fashion that we did was stupid. However it's done now, and while we should be putting a lot more effort into making sure that the various culprits hang from tall trees.

If you want to suggest that austerity doesn't work, then fine. But this is the Troika's way, and if you want to tell them that you're going to keep living the high life, then you sure as hell better have a plan B. You'll forgive me for be somewhat skeptical about the existence of such a plan in Mr Kerrigan's locker. 

muppet

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3422 on: December 21, 2011, 12:09:39 PM »
Quote
You can have free, unfettered capitalism, as long as you allow big business to fail.

This is exactly where it went wrong. We took on private bank debts instead of allowing them to fail, or at least some of it to fail. Imagine if Lenihan had said to jobholders that night 'you get 60c in the €, guaranteed, as long as you sign a full & final settlement within 5 days, anyone who doesn't gets nothing'.
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lawnseed

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3423 on: December 21, 2011, 01:10:43 PM »
There seem to be rumours of a new currency being formed between the UK and Ireland. The new currency will be basically a merger of Sterling and the old Punt. It will be called the Stunt. There will be 100 pants in a Stunt. Citizens in both countries will be encouraged to put all their pants in the banks to improve stability and to increase the number of stunts available to the banks. Both countries are pinning their hopes on the Stunt and hope that it will restore confidence.

If the Stunt proves a success there are plans to merge both countries. The new country will be called Iruk. Britain will join the new entity on the condition that they do not participate in any way. Ireland will join on the condition that it is frequently praised for being a good Iruker, even if it bankrupts the place.
:D
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thejuice

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3424 on: December 21, 2011, 02:10:22 PM »
well some good news that our exports had record highs this year. Nice bit of news among all the bad.

saffron sam2

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3425 on: December 21, 2011, 05:55:00 PM »
well some good news that our exports had record highs this year. Nice bit of news among all the bad.

Yes, but most of those exports left because they couldn't get a job at home.
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muppet

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3426 on: January 04, 2012, 06:51:04 PM »
Is it any wonder the banks are screwed:

http://www.rte.ie/news/2012/0104/ecb-business.html

Banks' deposits with the European Central Bank have hit a new record high, data showed today, suggesting that lenders remain reluctant to lend to each other amid ongoing market tension.
Banks put €453.18 billion on deposit at the ECB for 24 hours yesterday, breaking a previous record set last week for the facility of €452.03 billion, the central bank said.
Rising levels of deposits at the ECB are seen as a sign of market tension since the money deposited earns an interest rate of 0.25%, much less than the rate available on the interbank market. Heavy use of the facility suggests banks favour parking the money at low interest with the ECB rather than lending it to each other.
Analysts said the new record was due to banks opting to hoard their excess funds at the ECB after borrowing under its new three-year lending facility.
The ECB agreed last month to loan a record €489.2 billion to 532 banks in a three-year refinancing operation in a bid to avert a possible credit crunch.


This money is put on deposit for an annualized rate of 0.25%.

But a significant number of banks are borrowing from the ECB under the new 3 year lending programme at 1.75%.

It doesn't take a genius to figure out that borrowing (in desperation) at 1.75% and making 0.25% won't last long.
« Last Edit: January 09, 2012, 01:11:14 PM by muppet »
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muppet

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3427 on: January 09, 2012, 01:14:11 PM »
http://politico.ie/index.php?option=com_content&task=view&id=8189&Itemid=882&utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+Politicoie+%28Latest+from+Politico.ie%29

Vincent Browne talking about the deal that just won't go away, The Maple 10.

The most pertinent points are:

Drumm said: "The Financial Regulator and the Central Bank were in every meeting with me and other directors of the bank throughout 2008."

Referring to that transaction, he said: "That was the solution to a problem, which went to the very destruction of the Irish financial system and hence the government, and through its offices, through the Central Bank and through the regulator, they were pushing the bank like hell to fix the problem."


And:

Drumm was asked, who, in addition to the Financial Regulator at the time, knew about what was going on. He replied: "John Hurley was the governor of the Central Bank. I spent a huge amount of time with John. He told me that he was reporting daily to the Minister for Finance [Brian Cowen]."

He elaborated: "They called me day after day after day, to find out how it was going and when we called them up and said we are thinking of doing something with private investors, I then went down and sat with them and explained what we were going to do. 'Let's get this done.' Frankly they were thrilled, chirpy, because the fear factor [of a financial collapse] was just huge."


If the above were true it would mean that the Irish government approved the manipulation and deception of the markets. Just like Greece.
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supersarsfields

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3428 on: January 09, 2012, 01:36:05 PM »
Ummmm lending money to prop up share prices.

Rings a bell.

In all honestly Muppet as I know you keep a close look at this and the bail out in general what would be your gut feeling about this? ( I know my interest is mostly on the SQ aspect but leaving that to an aside).
Do you believe Drumm regarding the fact that the gov not only knew about the deal but were actively involved in it and therefore involved in the deception of the markets? Or would you believe that Drumm is just trying to limit his liability?

Just out of interest as I know there is alot of information and misinformation flying around regarding this so would be interested to hear which side you believe is more likely? Obviously no one can say for definite at this stage so just your gut instinst?

Denn Forever

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3429 on: January 09, 2012, 01:39:22 PM »
For those who don't know (me), who is this Drumm guy?  Double jobing in the HSE?
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muppet

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3430 on: January 09, 2012, 01:51:31 PM »
Ummmm lending money to prop up share prices.

Rings a bell.

In all honestly Muppet as I know you keep a close look at this and the bail out in general what would be your gut feeling about this? ( I know my interest is mostly on the SQ aspect but leaving that to an aside).
Do you believe Drumm regarding the fact that the gov not only knew about the deal but were actively involved in it and therefore involved in the deception of the markets? Or would you believe that Drumm is just trying to limit his liability?

Just out of interest as I know there is alot of information and misinformation flying around regarding this so would be interested to hear which side you believe is more likely? Obviously no one can say for definite at this stage so just your gut instinst?

1) David Drumm formerly of Anglo (not Professor Drumm of the HSE) is not the only person saying this type of thing, there are others such as Denis Casey formerly of IL&P who has sworn under oath that the regulator knew of the €7bn loans from IL&P to Anglo.
2) There is no way any bank on the planet post-Lehmans would have lent €7bn to Anglo-Irish bank without some very important people either pressurizing them to do so, or guaranteeing the money in some way. It could easily be argued that this was another deception of the markets and either IL&P were incredibly reckless in doing so, or a higher power gave the nod.
3) There is obviously a reason why Drumm, Fitzpatrick and co are not in jail. My guess is that they would bring some very important people with them. Cowen & Lenihan were dispensable as we have seen. Kenny and in particular the abrasive Noonan appear to be unable to do anything about it which suggest the real power is elsewhere, probably in the Department of Finance. Remember Kevin Cardiff was in the Department throughout the crisis, Cowen & FF were dispensable but it appears Cardiff wasn't.
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whiskeysteve

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3431 on: January 09, 2012, 03:03:58 PM »
Chief economist of Citigroup to tell RTE that Ireland requires a 2nd bailout according to Bryan Dobson on the tweet machine.

'@bryansixone: Chief economist of Citi tells RTE News that Ireland will need a 2nd bailout. More from David Murphy on 6-1 New'

Back to the markets by 2013 lol
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seafoid

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3432 on: January 09, 2012, 03:49:31 PM »
Chief economist of Citigroup to tell RTE that Ireland requires a 2nd bailout according to Bryan Dobson on the tweet machine.

'@bryansixone: Chief economist of Citi tells RTE News that Ireland will need a 2nd bailout. More from David Murphy on 6-1 New'

Back to the markets by 2013 lol

Jeff Madrick on Ireland

http://www.nybooks.com/blogs/nyrblog/2012/jan/06/europe-cutting-hope/

“And then there is Ireland. The recent experience of this once booming country should be deeply embarrassing to those who advocate austerity economics. For six months early last year, its national income started growing again after a couple of years of dramatic collapse following its own financial crisis. Ireland guaranteed all the debt of its over-aggressive failing banks to appease investors and then paid for it by cutting social spending sharply. Ireland’s leaders said with almost religious authority that this painful self-discipline was necessary to right the economy, and officials in Ireland and across Europe hailed the country’s brief rebound in 2011 as proof that it works. But then the Irish economy plunged in the third quarter of 2011 at its fastest rate ever. The upturn in the economy proved only temporary under the restraints of austerity economics. It may yet need another bailout. “


muppet

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3433 on: January 09, 2012, 04:07:51 PM »
This shows how the ECB operates: http://namawinelake.wordpress.com/
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seafoid

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Re: The Big Bailout of the Eurozone? (They think its all over...)
« Reply #3434 on: January 09, 2012, 07:38:07 PM »
This shows how the ECB operates: http://namawinelake.wordpress.com/
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