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Archive for the ‘sovereign debt’ Category

This is an attack on our democracy!

By
SHANE HEGARTY
Irish Times.com

PRESENT TENSE: IN 2004 Allied Irish Banks became embroiled in a furore when it was discovered to have overcharged foreign exchange customers to the tune of many millions.

At the time the figure was put at €14 million (it ended up costing the bank €65 million), and the initial number was enough to make it the lead story for most broadcasters and newspapers. There were rows in the Dáil. The bank’s then chief executive, Michael Buckley, neatly apologised by describing it as an “administrative cock-up”, as if someone had just crossed the wrong T.

On Monday Anglo Irish Bank revealed that its latest half-year losses amounted to roughly the same as it would cost to rent a black hole and throw the country into it. At the same time the bank admitted that it was beginning an internal investigation into the overcharging of customers by as much as €50 million.

A few years ago this would have been a lead story, a match to ignite the parliamentary hot air. This week? It was an addendum, an “and finally . . .”, just another pile of cash to throw on the green-tinged pyre. It seemed, in the grand scheme, almost inconsequential. After all, it would amount to a mere 164th of the total losses – or just over 0.6 per cent. It is a throwback to the days when we were faced with figures we could almost understand. But now it is a pittance. Sure, you’d pay that off in half a generation.

It is a reminder of just how vast the scale of the Anglo money pit now is. How mind boggling. Once again the media rightly spent a good deal of time trying to put the cost into some kind of context – how many space shuttles you could buy, that kind of thing – but there is an argument that no amount of analogies or graphics or football pitches full of imaginary money can ever truly get the scale across to the average brain.

There were figures this week that were comprehensible. Unemployment is at 450,000. In a country of four and a half million that’s a straightforward figure.

One in 20 mortgages is now in arrears; on any average street that can be grasped. One in eight of the workforce without jobs: it’s possible to think of these in personal terms, in groups of friends. You will know some of the people behind those statistics. You may be one of them.

But €8 billion or €25 billion? That’s way past fantasy statistics. It’s a riot of zeros. In fact, there has been occasional discussion about whether reports should always come trailing those zeros, so that the figures become comets burning across the pages. That way the reader would consistently be clobbered by €8,000,000,000 or €25,000,000,000.

But would that get it across any better than the analogies? Or the stats about Anglo’s half-year loss alone representing €2,000 for every woman, man and child in the State? (Which does, oddly, underplay it a little: many credit-card bills are bigger than that.)

We are told that we will be paying for it for the rest of our lives, and that our children will be paying for it too. But in one respect this is nothing new. We’ve been saddled with debt all our lives and are familiar with the idea of paying off sums over long periods of time, either on a national or a domestic scale. A lot of people left the boom with mortgages that will be with them throughout their journey from youth to retirement.

The irony of it, then, is that the head-spinning scale of the cost is so ungraspable that the pain can be appreciated only at the micro level. The Budget will act as a certain shock but will represent the wider hole we’ve found ourself in. A lost job or wiped-out shares will do it, obviously.

But it is tempting to suggest some way in which the particular, unprecedented national trauma inflicted on us by Anglo could be immediately conferred on every individual, so that we might all physically feel the pain of it rather than the dull shock and exhaustion; so that the weight of those zeros is tangible. Someone breaking into your house and stealing a few grand worth of goods. Or every child who sets up a bank account immediately incurring an overdraft of several thousand. Or Seán FitzPatrick just going from door to door with flapping albatrosses attached to millstones, and padlocking them around the neck of everyone, young and old, in the State

Comment:

What can I add that I haven’t said or posted in any one of my own 1500 articles in my blog, on this toxic toilet?
it is to early in the morning to get all worked up but that is exactly what has been happening every morning for the last 18 months. I think it is knowing precisely ,the scale of this fraud that is been perpetrated on us, by all of the people in power and the enormous scale of the debts that Clown and Lenihan have saddled each and every one of us with.
This is an attack on our democracy, our ability to provide for ourselves and our families, our hard won financial independence is now been robbed of us by the imposition of someone else’s massive debts
This fraud is been perpetrated be the very government that is supposed to protect the people and their families under the Irish constitution
The state is in fact robbing people the ability to provide for their own families by imposing the massive debts from corrupt and fraudulent banks and I maintain that the government do not under the constitution have the right to impose such debts on the citizens of Ireland without going to the citizens and having a referendum.
After all they are not only stealing from this generation but the next generation as well
I believe it is the duty of every Irish citizen to revolt against this unconstitutional and thus illegal measure the government has taken without the permission of the people
I do not believe this government, nor any government have the constitutional right to impose fraudulent and corrupt private bank debts on to mine or any other family in the state and I further believe I have the morel and legal right to try and stop them doing so in defence of our family’s financial well being
With this Anglo Bailout and the NAMA legislation we lose one of our fundamental rights guaranteed in the constitution (The protection of the family)
Depressingly we now know that this toxic toiler is spewing out its toxic poison (debts) all over the country like the BP oil disaster in the Gulf, only this is twice as bad and is going to cost us a lot more
Just think of that
At least the Americans were able to force BP to Pay up for their disaster but imagine the American President said that the Government were going to nationalize that oil wellhead and pay off all its debts as well as pay up for the cleanup and loss of business in the Gulf area It would never happen full stop
No the Yanks told BP shareholders you must pay up and no ifs or buts’
Here in Ireland Clown and Lenihan would have gown down on bended knees and kissed BP in the Ass
And nationalized their debts and probably begged them to continue running the show
With the losses announced by Anglo Irish Bank any normal person would have called it a day
When things are as bad as this all sane people would say enough is enough
We simply cannot continue to allow this blatant robbery of the Irish nation’s wealth
We cannot allow this or any other Government to rob us blind and saddle us with the debts of a private bank that is the play thing of the golden circle of this country.
This must be stopped at any cost and the guilty must be made accountable for their monstrous fraud!

Kenny prancing around the K-Club

 

The significance of Ronald Quinlan’s revelation today that Fine Gael sought and accepted a sum of money from a property developer — and not just any property developer — should not be underestimated.
O’Flynn Construction is one of the country’s most- indebted construction firms. The taxpayer has recently financed the transfer to Nama of those debts, estimated at around €1bn.
Michael O’Flynn, the chairman and managing director of O’Flynn Construction, on Wednesday last swung his Mercedes S350 executive saloon into the K Club to play a round of golf with the man who regards himself to be the Taoiseach-in-waiting.
Mr O’Flynn sanctioned his firm’s payment of €1,500 for the honour of teeing off just behind the leader of Fine Gael, Enda Kenny, and his most loyal lieutenant, Phil Hogan
He also sanctioned the payment of an undisclosed sum, possibly another €1,500 — maybe more, maybe less — to sponsor the famous 18th hole at the K Club, a club which is itself partly owned by Gerry Gannon, also of Nama fame, who is one of the so-called Anglo Golden Circle.

And so on and on it goes, full story at source
http://www.independent.ie/national-news/fg-taps-nama-10-developer-for-money-2263297.html

Comment:

I am disappointed to hear that Fine Gael’s Enda Kenny (self styled Taoiseach in waiting) did not have better judgement and for my money (the little I still have left ) I will bet that he most certainly will not be the next Taoiseach.
Nor does he deserve to be! with such display of total disconnect from the general public!
Displaying this total detachment for the feelings of the ordinary people who are struggling to pay their continuously rising household bills and  green party new taxes
Enda Kenny has made a major miscalculation here; prancing around the K-Club the taxpayers of this country will not forgive this making out with the golden circle boys from Anglo Irish Bank !
The last thing this so called Taoiseach in waiting needed was to be photographed with members of the golden Anglo Irish circle
How can anybody now believe that this man or his party will make the developers pay their debts to Anglo Irish Bank, now owned by the hard pressed taxpayers of this country?
Mr. Kenny I predict you will not be the next Taoiseach of this country and you might not even be in the Dail after the next general election
What a shame too!
The perception now of the ordinary people of Ireland is that Fine Gael has little or no difference in policies with Fianna Fail, with regards to NAMA or the Developers who ripped off all those now and for the foreseeable future will wallow in negative equity.
Enda Kenny’s golf outing at the K-Club has only encouraged the belief he is just as chummy as Lenihan and Cowen with the brazen developers and bankers who have destroyed our country and have made us servants of the international bond pushers
What dimwit is advising this man?

I call upon the Fine Gael and Enda Kenny to send back the donations made by this Developer and to commit no to take any donations from any other Developers involved with NAMA

please singe petition on facebook here

Debt Burden Falls Heavily on Germany and France

By JACK EWING

FRANKFURT — French and German banks have lent nearly $1 trillion to the most troubled European countries and are more exposed to the debt crisis than the banks of any other countries, according to a new report that is likely to add pressure on institutions to detail their holdings.

Enlarge This Image


Ronald Zak/Associated Press

Jean-Claude Trichet, left, president of the European Central Bank, with Josef Ackermann of Deutsche Bank.

French banks had lent $493 billion to Spain, Greece, Portugal and Ireland by the end of 2009 while German banks had lent $465 billion, according to the report by the Bank for International Settlements, an institution based in Basel, Switzerland, that acts as a clearing house for the world’s central banks.

The report sheds light on where the risks from Spain and other troubled euro-zone countries are concentrated, but left open the question of which individual banks would be most endangered by declines in the prices of sovereign bonds or a surge in bad loans made to companies and individuals. The B.I.S. did not identify individual institutions, in line with its confidentiality rules.

Voluntary disclosure by banks has been uneven. Hypo Real Estate Holding, a real estate and public-sector lender based near Munich, has put its exposure to government debt from the four countries plus Italy at more than €80 billion, or $97 billion. Deutsche Bank, in Frankfurt, says it holds €500 million in Greek government bonds and no Spanish or Portuguese sovereign debt.

But there has been little disclosure from the hundreds of smaller mortgage lenders, state-owned banks and savings banks that dominate banking in countries like Germany and Spain.

“More information and disclosure on bank and financial institutions’ holdings of periphery paper would be beneficial,” Jacques Cailloux, an economist at Royal Bank of Scotland, said Sunday. Mr. Cailloux had not seen the report — which was released to news organizations on the condition that they not publish the findings until late Sunday — but he was one of the authors of a Royal Bank of Scotland study in May that anticipated many of the B.I.S. findings.

All told, Spain, Ireland, Portugal and Greece owe nearly $1.6 trillion to banks in the 16-country euro zone, either in the form of government debt or credit to companies and individuals in the four countries, the report said. Credit from French and German banks accounted for 61 percent of that total.

Uncertainty about which banks may be at risk from Greece and the other countries has fed mistrust among financial institutions, causing interbank lending to wither and leading European Union leaders to take extraordinary steps to prevent a financial collapse.

The European Central Bank has been pressuring E.U. regulators to release data on which banks may be most at risk, to separate the healthy banks from those that may be in trouble.

“We are encouraging them to do whatever is necessary to improve the sentiment of the market because that is the real issue today,” the E.C.B. president, Jean-Claude Trichet, said at a news conference last week.

Mr. Cailloux said that releasing the results of so-called stress tests, which examine banks’ ability to withstand market shocks, would be useful if the tests were based on realistic possibilities and there were measures in place to bolster the banks that prove vulnerable.

The lack of information about which banks could suffer most from Europe’s debt crisis led to the near-seizure of money markets in early May. That, along with plunging prices for sovereign bonds from the weakest countries, prompted the European Union and the International Monetary Fund to pledge nearly $1 trillion in debt guarantees for euro-zone governments.

The European Central Bank also took the unprecedented step of buying European government bonds in the open markets, where trading had nearly come to a halt.

“There is mounting evidence that the blind don’t want to lend to the blind,” Ed Yardeni, president of Yardeni Research, wrote in a research note last week.

The B.I.S. figures confirm estimates of the level of risk by analysts at Royal Bank of Scotland and others, which had been extrapolated from B.I.S. data and other sources. But the B.I.S. report provides more detail on country-by-country exposure, and the organization’s imprimatur means it will be difficult for critics to dismiss the information as exaggerated.

Most of the claims held by the French and German banks were from companies, individuals or other banks, and Spain was the biggest debtor country. But much of the holdings were government debt — $106 billion for French banks and $68 billion for German banks. The figures, which the B.I.S. presented in dollars, may offer a clue why the French government, in particular, has been keen to provide aid to Greece and the other troubled countries.

Private-sector debt from Spain, Greece, Portugal and Ireland has also become a concern, because government austerity programs and economic downturns in those countries may also take a toll on the ability of companies and individuals to repay loans, and lead to a surge in defaults.

The risk from the so-called peripheral countries is by no means limited to France and Germany. British banks have lent $230 billion to Ireland, while Spain — besides being one of the countries with a debt problem — has lent $110 billion to residents of Portugal.

The B.I.S. put total exposure by U.S. institutions to Spain, Greece, Portugal and Ireland at less than $200 billion.

source http://www.nytimes.com/2010/06/14/business/global/14eurobank.html?ref=jack_ewing

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