Bank Guarantee Could End Up Costing €40 Billion, Says Central Bank Governor

Forty billion euros.

Forty thousand million euros.

That’s how much it might cost us to bail out the gamblers who made bets on the two failed banks, Anglo and Irish Nationwide,  combined with the potential losses in AIB, full of swaggering puffed-up fools into which the government pumped €20 billion.

The good news is that they’ll probably get back something from AIB since it’s still trading.   They might even get back the entire amount, though Professor Patrick Honohan, current governor of the Central Bank, doesn’t seem too sanguine on the subject.

In his evidence to the Dáil banking inquiry, Honohan suggested that Michael Noonan was hoping for improved share prices  rather than basing his predictions on the current reality, or as we sometimes call this sort of behaviour, being a politician.

The truth is that, as matters stand, Ireland is exposed to a cost of €40 billion as a result of propping up two failed banks and one basket case, and this is real money we’ll have to pay.  This is a burden more crushing per capita than the German reparations from both world wars, even though we invaded nobody, bombed nobody and murdered nobody.

And all because the German-dominated European Central Bank wouldn’t let us liquidate Anglo Irish Bank and Irish Nationwide.

Why?  Who knows?  Some form of fiscal orthodoxy perhaps that prevents governments from pointing fingers at idiots.

What idiots?

Simple.  The idiots who ran those banks, including idiots like David Drumm, the thoroughly unbelievable, lying, fraudulent spiv at the controls of Anglo, if the US judge’s assessment of him is to be believed, and Fingleton, a puffed-up fool who walked away with a cool million and a gold watch after his ridiculous building society folded.  Not to mention those idiots who ran AIB into the ground.   The same people who cornered Lenihan and Cowen in the middle of the night and bullied them into extending a general guarantee to every bank in the country, even though there was no good reason to do so.

According to Honohan, Brian Lenihan didn’t want to guarantee Anglo or Irish Nationwide, perhaps recognising firstly that they were both completely sunk, thanks to mismanagement, but also that letting them go would have no lasting impact on the country, since neither bank was integral to the economy.

Honohan claims that Lenihan was overruled by a senior political figure during the famous incorporeal cabinet meeting, attended by three men and a host of snoring fools, so that’s got to narrow it down.  There was Lenihan, the attorney general and there was Biffo, without a pint in his hand, and not singing, but still not at his sharpest by the look of things.

Who overruled Lenihan’s advice?  I don’t know.   Perhaps it was the ghost of Charlie Haughey.  Perhaps it was, but we need to be told. When forty billion euros are at stake, when the entire country’s destiny is on the line, do you really want a pub-singing Offaly solicitor making the final call?

Who made the decision to saddle Ireland with a debt of €28 billion from Anglo and another €36 billion from other sources, for no obvious reason?  And why?

This is something we need to be told.

These people need to take responsibility for what they have condemned Ireland to endure for generations to come.

And if they won’t take responsibility, they need to be held to account whether they like it or not.


Here’s an estimate when we thought the cost was only €25 billion.

Economy Politics

Mirror Mirror on the Wall, Who is the Sorriest of All?

brian cowen sorry for economic collapseNo one more sorry than I about what happened,’ says Cowen .

I have never met Brian Cowen.

The closest I came was twice, once when I saw him and some others in a hotel near the Dáil and the other time when a mutual acquaintance with whom he had been in school stood me up for a beer in favour of the then Deputy.  I am sure and am assured that he is a decent chap, and one who has as much empathy as any other. This can only be highlighted witnessing the shambles that society has entered into.  I believe him when he says that the actions, ultimately disastrous as they were and serially incredible as they seemed even at the time, were taken by him and his cabinet for the best of intentions. Alas, not just the road to Clara and political ignominy is paved with good intentions.

That said, it seems to me to degrade language for him, in his present circumstances of a 140k per annum pension, to say he is the sorriest of all.  A partial list of people whom one might think are more sorry than he for the economic collapse might include

  • the nearly 400,000 people who have emigrated since the start of 2009
  • the nearly 200,000 people who have not emigrated but who as of July 2013 were more than one year on the live register.
  • the residents of Priory Hall left in the lurch by state, court and society but who are being hounded for payment by the banks they saved
  • the residents of poxy pyrite mansions dotted round the country who have been left in the lurch by insurers, Homebond, the state and the legal system
  • the 77,000 people who saw their respite care grant cut.
  • economists in banks who ramped the system
  • economists in universities who could have, but didn’t, shout stop earlier or at all
  • the 50 or so FF TDs who lost their jobs in 2011
  • The 30 plus Labour TDs not in cabinet who now face the electoral whirlwind in 2014

One could go on.

This is not an Anti FF post. It is anti a style of political rhetoric which thinks a half-baked apology en grudge served on a bed of self-justification with a glass of crocodile tears is enough. Far better to respond to all media with ” I am retired from politics.  What we did we did for what we thought then were the right decisions. Of course I regret any pain and suffering my and others actions caused. Thank you”. Simple, dignified, and accurate. Engaging in competitive misery from a well paid retirement is none of the above.


This article also appears on Brian Lucey’s website here.

Economy Favourites

Burning the Bank Bondholders. ECB Changes Position.

Hands up all those who said you can’t burn senior bondholders.

Anyone?  No?  You’re all very quiet over there.

When even the Financial Times was saying Ireland should impose burden-sharing on the failed banks’ bondholders by insisting on a debt-for-equity swap, there was a clamour, not only from European politicians and from the European Central Bank, but also from our own domestic doomsayers, predicting the end of the world if we didn’t bail out these mega-rich investors and save them from the consequences of having made a bad business decision.

And so we duly went and put Irish citizens into hock for generations to come so that unimaginably wealthy business people might not suffer any loss when their bet went bad.  I’ll keep repeating this until they physically hold me down and gag me.  The money poured into Anglo and Irish Nationwide was not a bank bailout.  Why?  Because those banks were dead and had no hope of ever trading again.  It was the rescue of gigantic hedge funds and private investors all over the world and it was heaped on the shoulders of the Irish people by two idiots, Brian Cowen and the late Brian Lenihan.

As a result of bailing out these speculators, our country is on its knees.  Imagine it.   These two buffoons took it on themselves to turn private-sector losses into public debt.  Did you ever hear the like of that?

B&B invented a new political ideology that was the very opposite of capitalism.  It was more like a demented form of communism in which the State took over not the means of production, but the means of making a loss.  Where it came closer to Soviet-style communism was in the fact  that the private citizen mattered not one iota.  Lenihan even had the effrontery to tell us that this was our patriotic duty.

Our patriotic duty, to subject ourselves to penury so that no gambler in the betting shop of the markets might lose a wager.

And if B&B were inept, they were enthusiastically egged on by Jean-Claude Trichet in the ECB.  When Trichet issued his instructions, his two bumbling marionettes in Dublin danced to his tune.  Even when the Danish government inflicted losses on bondholders, the mantra went on: you can’t burn the bondholders.

Well guess what?  You can.  Suddenly, since Spain and Italy ran into trouble, since Francois Hollande ascended to power in France and since Mario Draghi took over from Trichet at the ECB, it now becomes possible to do what the FT, Joseph Stiglitz and every other person of sanity has been saying.  Suddenly, it’s possible to stand back and let investors take their losses in true capitalist style.  That’s what Spain will be doing, with the blessing of the ECB.  No bank guarantee for them.  They’ll be saying this is a private-sector problem, with private-sector companies failing and it has nothing to do with the sovereign government.

Great news for Ireland, you’re probably thinking.

Eh — no, Ted.  Unfortunately, all the Anglo and Nationwide bondholders have already been paid off.  They’re gone and so is the money.  Gone, including Abramovich who bought Anglo bonds at ten or 20% of face value on the secondary market and insisted on getting the full price from our government.  How many Chelsea players did the Irish taxpayer fund with that handout?

Abramovich threatened to sue the government for going back on its commitments.  The threat was hollow, since the government was never obliged to stick with a unilateral guarantee that carried no reciprocal benefit for the Irish State and which was based on false information provided by the banks.  More on that another time as we begin to peel back the onion-layers on the night of the incorporeal cabinet meeting.  A virtual cock-up in every sense.

So where are we going with this?  What’s the end-game?

Well, we still have the issue of the promissory notes.  If you remember, these are debts owed by our government to the Irish central bank.  You see, in order to pay off the bondholders, the central bank created money out of thin air, as it’s fully entitled to do.  But our government must then pay yearly sums into the CB to write down that funny money.  Now here, as I see it, is where there might be scope for manoeuvre.  Because the ECB has accepted the principle of burden-sharing for Spain and Italy, Ireland is the only country left swinging in the breeze.  Up to now, at the insistence of the Germans who have a pathological fear of inflation following their experience with the Weimar Republic, there has been no possibility of quantitative easing, which is a nice way of saying printing money.  But Ireland’s money is gone and our government is on the hook to pay it back, so what I would do in Baldy Noonan’s shoes, is look for a derogation.

Let us be the exception in two ways.  First, we’re already the exception in having guaranteed the failed banks 100% at the insistence of the ECB, which now agrees that such a policy is insane.  Therefore, for a quid pro quo, let us also be the exception by permitting cancellation of the promissory notes, effectively increasing the Eurozone money supply.  The fig-leaf can be that it’s a once-off deal involving a piddling sum in European terms, to acknowledge that Ireland went far beyond what Spain or Italy are prepared to do and to recompense us for the pain caused by the obduracy and stupidity of Trichet’s policies.

That’s what I’d be looking for, but then again, I’m not an economist and I’m not a politician.

Maybe smarter people than I am might be able to explain it better.



Micheál Martin’s Speech at Fianna Fáil Árd-Fheis 2012

It was fascinating to hear Micheál Martin apologising at the Fianna Fáil Árd-Fheis, although precisely what he apologised for  is open to debate.  Martin has a gift for appearing sincere while simultaneously talking utter tosh — a great asset in any politician, but by no means an essential skill.  Bertie Ahern had a gift for sounding like an illiterate corner-boy while talking nonsense, and yet the entire country voted for him.  Charlie Haughey was a repulsive little lizard with a basilisk stare, and yet some people thought he was wonderful, despite his Irish solutions to Irish problems, a phrase so riddled with his innate dishonesty that it came to epitomise his entire leadership of Fianna Fáil.

Therefore, when a man like Martin appears, with a face like a liberation-theology priest, his party is doubly blessed.  For once, they can say that they are led by a man who is neither a drunk nor a chancer, but unfortunately, it isn’t possible to say the same about the grassroots.

His speech starts out fairly well, acknowledging the state of the country and the pressure people are under.

As we meet tonight, there are people throughout our country who are experiencing very hard times. They are struggling with finding a job, paying their mortgage or losing a loved one to emigration.

The problems facing people are too serious for tired, old political games. I believe that people in public life have a responsibility to chart a way forward and to work to find solutions to the challenges facing Ireland.

We won’t disagree with him on that.  The problems are too serious for tired old political games, but perhaps Micheál might consider the possibility that the very existence of his party constitutes a tired old political game.  I’ve made the point before that Fianna Fáil and Fine Gael are anachronisms and that, since their policies are identical,  they should both be dissolved and combined in one new party.  They have the same origins and they represent the same sort of people.  They have ridiculous titles that mean nothing and they have no underlying beliefs, although on balance, Fianna Fáil have tended to be the more corrupt of the evil twins, as Claire Ryan illustrated when writing here about Fianna Fáil’s involvement in corruption.  The rot didn’t start yesterday.

Unfortunately for Micheál Martin, as his speech goes on, it starts to sound suspiciously like the political waffle of old, and increasingly delusional.

This party is determined to play a constructive and central role in Irish public life. And our focus is very clear – we will do all we can to promote credible solutions to promote growth and job creation. This government of broken promises must be held to account for its bad decisions. But we will tackle them responsibly.

When something is right for Ireland, we will support it, when it is wrong we will oppose it.

Let no one be in any doubt about where Fianna Fáil stands – we believe that politics must be about solving problems not exploiting them.

When something is wrong for Ireland they’ll oppose it?  Clearly, the Fianna Fáil he speaks of has been abducted by aliens and replaced with identical doppelgangers.  Greetings.  We mean you no harm.

According to Micheál,

I first got involved in Fianna Fáil because we were a party of community, of integrity and of decency. We stood for social solidarity and were on the side of people trying to make ends meet.

Micheál Martin was born in 1960, when Taca was at its height.  Already, when he was but a babe in arms, Fianna Fáil cronies had been given control of vital infrastructure.  Todd Andrews had destroyed the railways so that his quarry-owning pals could make vast profits.  The McGrath family had been facilitated in running the biggest gambling scam the world had ever seen.  Dev had scammed thousands of Irish-Americans with his Irish Press shares swindle.  By the time Martin joined the FF party as a student, Des Treanor was already running an illegal bank on behalf of tax-dodgers like Charlie Haughey, who believed Ireland existed for his own pleasure and enrichment.

With the very next sentence, Martin falls into absurdity.

When Europe was falling to fascism, our founding leader Eamon de Valera introduced a democratic republican constitution for this state.

Correction.  When Europe was falling to fascism, this state was excluding Jews from asylum.  Ireland was sending demented Catholic ideologues to fight for Franco in Spain, and when fascism was finally defeated, de Valera paid his respects to the German embassy on the demise of Herr Hitler. After the fall of fascism, de Valera’s government welcomed the murderous head of the Croatian Ustasha, Artukovic,  and gave him sanctuary in Dublin.  Likewise, when Europe was falling to fascism, de Valera was consulting the Archbishop of Dublin about the wording of his proposed constitution for a so-called republic.

This is delusional stuff out of Micheál Martin, although I realise that it was crafted for the footsoldiers.  I know he’s an intelligent man and he can’t possibly believe this kind of guff, but if this is the grassroots of the party, what precisely are we dealing with and do we need such an organisation claiming the right to manage our country?

And so we come to the apology:

… we have a clear duty to admit our mistakes. It’s not enough to point to the worst world recession in 80 years and the euro zone crisis. Nor to point to the fact that other parties were demanding policies which would have made things worse – that’s for them to answer for.

We were in government and we should have acted differently.

We made mistakes.

We got things wrong.

And we are sorry for that.

No equivocation.

No half-apology.

Just the plain, unvarnished truth.

Last year the people did what they were right to do – they held us to account. People were angry and they showed it, delivering a historic defeat for us. We fully acknowledge the scale of the defeat.

I don’t accept this.  Everyone is entitled to make mistakes, but Fianna Fáil went far beyond that and this is where Micheál Martin has failed.  It’s not that his government got things wrong.  The problem is that they were in the pockets of bankers, developers and builders.  They were on the payroll.  They were bought and paid for, and it was no mistake.  No failure of policy.

Fianna Fáil were the property of big business and they did as they were instructed to do.

Let’s have no more talk of getting things wrong.  If this is Martin’s understanding of what really took place then he has no business leading any party, big or small.

In March 2010 I argued that Ireland needs vision and focus, and I haven’t changed my opinion on this.  In fairness to Micheál Martin, although he was a member of the  Fianna Fáil cabinets that destroyed Ireland, he didn’t personally gain in any way from the corruption that attended the party of which he was a leading member, but he was one of those who completely failed to display vision and focus when setting out domestic public policy.

I once argued that much of the country’s problem derives from the passive and supine behaviour of the Irish themselves, and again, I haven’t departed from that view.  I made the point that the Irish had deliberately been infantilised by both church and State as a means of exerting control, and that it’s time to promote critical, independent thinking if we’re going to find a way forward.  Fianna Fáil is a party of true believers, and therefore the very antithesis of such thinking.   It has nothing to contribute to a new Ireland.







Eminem Takes Over Efinef

Fianna Fáil Split



Biffo and Seanie Go Golfing

Isn’t it a great little country when the chairman of a failed bank can meet up with the Prime Minister for dinner and a round of golf at Druid’s Glen and nobody mentions a word about the trouble the bank is in?  Two months before the government issues a country-destroying guarantee to cover the staggering losses run up by Fitzy and his pals, this banker meets the head of that same government.  They play some golf, enjoy a nice dinner, perhaps light up a cigar with a brandy and talk about …

Pop music?

It was a social occasion, protests Biffo.  No-one, it seems, mentioned a word about banks or money or anything.

A social occasion.

Imagine that.

Do Biffo and Seanie play much golf?  What are their shared interests?  Do they go to the movies together?  Are they avid stamp collectors?

Whatever they have in common, Fitzy certainly had no problem getting Biffo on the blower.  Only a few months previously, when Cowen was still finance minister, Seanie phoned him to talk about the disastrous state of Anglo shares and the looming Quinn screw-up.

I told him I’d refer it to the governor of the Central Bank, Biffo mumbled.

So how did the conversation go?  Hi Brian.  This is Seanie.  We must meet up for a game of golf some time, and a nice meal.

Howya Seanie.

Look Brian, the thing is this.  Anglo’s shares are goosed.  And that Quinn fellow is into us for billions.  The bank is going down the toilet unless you help us out.

I’ll tell Hurley.

That feckin gobshite!  Listen Brian, if we go down, so will half your party cronies.  I know where all the bodies are buried so you’d better front up here, fat boy.

I’ll think about it.

Lovely talking to ya Brian.  Se you in Druid’s Glen.  Byeee!

So we know that Fat-Boy was having phone conversations with Fitzy while Anglo was going tits up.  And we know that those conversations were about the imminent collapse of the bank.

Now, there are only two possibilities regarding the golf special.

Either Cowen is a gullible fool who believed all the horseshit Fitzy threw at him, in which case he wasn’t fit to be finance minister or prime minister, or else, he knew exactly where the disaster was going.

And if he knew that, why was he playing golf with the chief perpetrator?

And finally, I’d like to know who paid for the round of golf and the dinner and the cigars and whatever else Biffo and Mrs Biffo had that day.  Did Biffo put his hand in his own pocket or did Seanie Fitz pick up the tab?  And why would he do that?


Viva El Presidente!

Three ways the president of Chile is better than Brian Cowen.

1. The president of Chile digs holes to get his people out, not in.
2. The president of Chile can speak English.
3. The president of Chile can stay up all night without getting drunk.

This man is not Brian Cowen

This man is not the President of Chile



Eoghan, would you come in here a minute an’ close the door.  That’s right. Come in, I want to talk to you, going forward.

What’s up, Boss?

Jesus, Eoghan, don’t call me fuckin Boss.  You know I hate that name.

Sorry Boss — I mean Brian  What’s up?

Eoghan, do you believe in reincarnation?

Mhac a’ Deo orainn, a Thaoisigh!  Why do you ask such a thing?

Here.  Have a shot of this stuff.  500-year-old Tullamore Dew.  Old TD, we call it.  Go on. It’ll sharpen your pencil, going forward.  Isn’t that what a good press secretary needs?

Clink.  Glug.  Glug. Wubble.  Wubble. Wubble. Goaarrraaarrrhhh!!  Wuh!!

Jesus, that’s better.  Listen, do you believe in reincarnation or not?

Well, Brian, I never gave it much thought.  Did I ever tell you about the time I was commanding a company of men in Lebanon and —

It’s a simple fuckin question, going forward.  Do you believe in reincarnation?

Níl fhios agam, a Thaoisigh.  You seem very troubled.

I am Eoghan.  Very fuckin troubled, goin’ forward.  Eoghan, I’m afraid I’m afraid Haughey came back to life an’ he’s takin’ me over.

Dheabhal!  That’s not good.

No.  It isn’t.  Everywhere I look, I’m surrounded by gobshites, just like Haughey.

Well, Brian, it is Fianna Fáil after all.  One time, in Cambodia, when I was in charge of —

I know. I fuckin know that.  I know that, but there’s more.  Here.  Have another Tullamore Dew.

Clink.  Glug.  Glug. Wubble.  Wubble. Wubble. Goaarrraaarrrhhh!!  Wuh!!

You see, Eoghan, I’m starting to see things in the middle of the night.  Awful things.  Lenihans everywhere waving their livers at me.  Last night, I had a nightmare that Kebab Lenihan was launchin’ a book denyin’ evolution.  Mind you, Kebab is livin’ proof that evolution is bullshit, but still.

Eh, Taoiseach —

Seriously.  I’m not fucking jokin’.  Everywhere I look, fuckin’ GUBU.  There’s another fuckin eejit sendin’ in fake invoices for mobile phones or some fuckin thing.

Eh —

Just as well I have plenty of this TD to keep the shite blotted out.  Fuckin Ahern flyin’ to fuckin Donegal in the government plane.  No, not that prick.  The other fuckin eejit in Justice.  Here.  Have another shot.  Helicopter view me arse.

Clink.  Glug.  Glug. Wubble.  Wubble. Wubble. Goaarrraaarrrhhh!!  Wuh!!

I’m gettin’ a strong urge to buy a yacht and a horse.  I even hired a bloke from WAAMA to stock me a library and make a list of the good ones, just like Haughey.  I paid another bloke to give me a quick run-down on what artists I should like.  Make it fast, I said.   Pluck the low-hangin’ puppies.

Taoiseach.  If I may suggest.  Have you considered an exorcism?

A wha’?

Well, back in an Spidéal, when I was a buachaillín growing up, the old people were very aware of these things.  Did I ever tell you about the time in Ethiopia when I was commanding  —

Listen Mara, I mean Eoghan, you need to get on top of this story fast.  Here.  Have another TD.

Clink.  Glug.  Glug. Wubble.  Wubble. Wubble. Goaarrraaarrrhhh!!  Wuh!!

As I was sayin’, you need to get on top of this an’ make the party look good.

Eh, Taoiseach, I’m the government press secretary, not the Fianna Fáil press secretary.

Your MY press secretary, Mara.  Now get that gobshite Dunne in here and tell him to bring a million quid.  And make sure all those fools are back at their desks.   When my great grandfather, Aureliano Cowen was founding the Brazilian navy …

Taoiseach.  There is one small problem.  With our finances in their current state, we might not be able to pay the exorcist.


Well then Taoiseach, I’m afraid you’ll be repossessed.


Máire Geoghegan-Quinn Hands Back Pension

So there you have it.  Máire Geoghegan-Quinn decided to hand back her ministerial pension for the duration of her tenure as an EU Commissioner.


Because of the public outcry.

And how do you measure a public outcry?

Well you don’t, unless you happen to own a TV station, in which case you send out some reedy-voiced cub reporter to interview gobshites on the streets of Ireland.

You’re a middle-aged man standing here outside the dole office and I’m a nervous 23-year-old girlie trying to look grown up.  So tell me, do you feel outraged that MGQ is getting a 100k pension?

I do.




I do.  I feel …



Look, the general public don’t think at all.  We know that, because if they did, we wouldn’t have Fianna Fáil in government and MGQ wouldn’t be getting the hot job in Brussels.  This public outcry is something whipped up by loudmouth  populist gobshites like Joe Duffy as a substitute for genuine analysis.

It’s begrudgery dressed up as social concern, and it shows how low journalism in Ireland has sunk.

Let’s examine it rationally.

Should ministers have a special pension at all?

In my opinion, no they shouldn’t.  It’s a privilege to serve in government, and as we’ve seen with the Bertietron, there’s plenty of money to be made schmoozing after leaving office.

Asking MGQ to relinquish the ministerial pension in the public interest is nonsense.  By taking the Commission job, she’s no longer on the Irish public payroll, and therefore not taking a double hit of taxpayers’ money, save for the minuscule contribution we make to her salary as part of our EU obligations.

Many people retire from one job and take up another.  It’s normal, and would only be objectionable if MGQ was being paid on the double by the State.

But hold on.  Isn’t that what every former minister in our parliament does?  Aren’t they all getting a ministerial pension and a TD’s salary?

Oops!  Now we can see why the FF ministers trampled over each other to say that MGQ should relinquish the pension temporarily.  If they didn’t, public attention would focus on their own cosy little arrangement, while they exhort us to starve as part of our patriotic duty.

The question to be more properly put is this: why don’t all former ministers give up their pensions while they’re receiving a TD’s salary?

You couldn’t have that, though.  Could you?  Next thing you know, they’ll be saying Bertie shouldn’t have a free limo and two chauffeurs to drive him around the country promoting his daughter’s chick-lit novels.

And that, my friends, is why Máire Geoghegan-Quinn was forced to hand back the ministerial pension, for now.  But fear not.  This is a cross-party worry for ex-ministers, and you can be certain that a future administration, no matter what its colour, will find a lucrative slot for MGQ to make up the difference.

Watch this space.


Nama – When Is A Haircut Not a Haircut?

Well? When is a haircut not a haircut?

Answer: when it’s not even a light trim.

Now, I’ve been doing a little calculating, but of course I’m not an accountant or an economist, so this is probably all wrong, but anyway, here goes nothing.

Pic courtesy of C'est la Craic

Yehudi Lenihan announced that Nama would pay €54 billion for the banks’ bad loans, which have a face value of €77 billion: in other words, he says he’s paying 70% of the original value they had when the loans were issued at the height of the boom. These are the values that were assigned when everyone was coked out of their heads and drunk on power and helicopters. Let’s call this the loans’ lunacy value.

Because he’s only paying €54 billion and not €77 billion, this is called a discount.

But wait. That lunacy value of €77 billion includes €9 billion in rolled-up interest, so the loans were actually worth €68 billion at the top of their value. Their lunacy value.

So not only do the taxpayers make sure that the banks get most of their money back after their disastrous lending spree, driven by greed and stupidity. We also make sure that they get the interest they feel entitled to earn on these criminal loans.

But it doesn’t end there.

Because the government nationalised Anglo-Irish instead of letting it collapse like the zombie it is, we’re liable for the entirety of its bad loans, which amount to €28 billion, out of which you have to strip about €3 billion in phony rolled-up interest. We’ll say Anglo’s total bad assets are worth about €25 billion.

I might just add in passing that Anglo-Irish Bank was not a bank in the sense any of us understand, but simply a conduit for passing credit to builders. It had no importance to the wider Irish banking system and could have been allowed to collapse without the slightest impact on our economy. Yet, despite this, our government chose to nationalise it and make its problems our own.


Well, that’s one of the biggest questions that will have to be answered. Why did Fianna Fáil rescue the developers’ bank when they didn’t have to?

Time will tell.

Let’s see now. Time to recap.

  • Nama gives €19 billion to Anglo.
  • The government tops that up with another €6 billion.
  • Nama gives €35 billion to the rest of the banks.

That makes €60 billion in total, against a maximum loan value of €68 billion, which was their supposed worth at the most insane level of valuation.

That’s 88% of the total inflated value of the loans, when measured at the absolute height of the property bubble.

Isn’t that great? I hope you feel a lot better now, knowing how much you’ve contributed to guarantee the top bankers a sound night’s sleep.

Leaving Anglo out of it, the total face value of bad debt is €49 billion, but you have to take out the proportionate amount of rolled-up interest of about €5.7 billion. (In other words, the interest the banks would like to earn for making insane loans to people who couldn’t possibly pay the money back). We’ll call it €6 billion for round figures. That leaves the face value of the un-nationalised banks’ bad debt at €43 billion.

€35 billion of Nama money goes against this bad debt, so Yehudi Lenihan is actually paying the independent banks about 81% of their lunacy value while their real value might be in the order of €20 billion. Might be. Nobody knows.

So, by my reckoning, Yehudi Lenihan has just suggested that we give the banks’ big institutional investors a free gift of €15 billion.

Now. Have a look at those rough figures and correct me wherever I made a mistake. After all, I’m neither an accountant nor an economist, and I don’t really understand the subtle details of these things.

Now that I think of it, I’m just like our Minister for Finance and our Prime Minister. The only difference is, I don’t have the power to give your money to the billionaires who want it.

Here’s an interesting question in today’s Irish Times.

If the bank loans for Nama are only worth €47 billion, why is the Government going to pay €54 billion?

Do you have the answer?

If so, please let us have it as soon as possible.  Thanks.


Meanwhile, Fingers Fingleton enjoys his retirement.


Also on Bock

Nama for Mister Men

Paying For The Celtic Tiger

Why Are Irish Banks Backing Liam Carroll’s Zoe Group?

IMF report on Irish economy

NAMA Millstone Will Sink Ireland

NAMA Long-Term Economic Value Explained

Economic Treason – Simple Recipe

Asset Management Agency – Ireland’s Bad Bank

Bludget 2009

Budget 2009 – My suggestions

Fingers Fingleton Sole Beneficiary of €27 Million Irish Nationwide Pension Fund

Bailing Out The Property Developers

Business Ideas for the New Great Depression

Sorry? What?

Irish Government Ministers

Denying the Economic Crisis

Anglo-Irish Bank’s Croke Park Corporate Box

The Anglo-Irish Ten, Hiding Behind Client Confidentiality

Irish Bank Guarantees

Sean Fitzpatrick Tells Parliamentary Committee To Fuck Off

Letter To Brian Goggin, Bank of Ireland CEO

Anglo-Irish Bank, Brian Lenihan and the 7-Billion-Euro Fraud

Irish Government Nationalises Anglo-Irish Bank


Biffo Buys Bananas

I was wondering why there were so many cops around the market this morning, including an exceptionally well-turned-out senior-looking guy.  The leather gloves are the giveaway.

What the fuck? I thought. Times must be hard when a chief superintendent has to walk the beat in the market on a Saturday morning.

But no.  It turns out that Biffo was in town, with his entourage of baggy-suited fixers, like a crowd of drunken uncles at a country funeral.

Desperation is a terrible thing, and I suppose Biffo was trying to raise his satisfaction ratings from minus ten million to about zero by pressing the flesh of market traders and the ordinary people.

You know: the people his party has robbed, cheated, embezzled and landed in a state of complete economic disaster.

Yes.  Those ordinary people.

Cowen was out of luck.  Nobody was interested in talking to a sweaty old troll as he led his bunch of mumbling gobshites from stall to stall, trying to look like living human beings but managing only to look like terrified Fianna Fail hacks without an adult thought between them.

Cowen paused at a fruit and vegetable stall, nodding to Peter Power, who obligingly bought a bunch of bananas and handed them out to the Lads as they moved away.

Well, said a woman buying fruit at the stall.  That’s about right for a banana republic.