Thursday, 30 October 2008

Halloween Chill - Irish Ghost Stories - Scary 'Ghost' Estates...

50,000 new homes lying empty in 'ghost' estates...

AT LEAST 50,000 newly-built homes are lying empty in 'ghost' estates across the country because of the economic downturn.

Hard-pressed developers and estate agents are being forced to drop their asking prices by as much as 50pc in a desperate effort to shift unwanted homes dotted across the country.

An Irish Independent investigation has also found that hundreds of housing estates which should have been completed at least two years ago are still unfinished.

Figures from local authorities show that county councils will not take responsibility for maintaining roads and open spaces in at least 300 estates because they have not been finished to the standard required by the planning permission.

The glut of empty homes -- many built under tax break schemes -- shows the pressures now being faced by homebuilders in the economic downturn.

House completions are at their lowest level in years and builders are putting off starting new homes until the market improves.

Thousands of potential homebuyers have also been refused access to credit, with many others deciding not to buy in the hope that prices will fall further.

The Irish Independent has found:

The situation is worst in the midlands, border counties and the west of Ireland. Many properties are in areas marketed as being close to Dublin and other major cities, but in fact are in rural areas.

There is up to 12 months' supply of homes currently empty -- twice what would be expected in a 'normal' market.

Rural villages, such as Rathcormac in Co Cork, are swamped with unsold real estate.

One developer has slashed asking prices by 50pc in an effort to sell properties.

Earlier this month, a report by Goodbody Economic Consultations found that 50,000 units had been built but not sold. It estimated there was 19 months of supply of second-hand homes for sale in Ireland. It concluded there could be a vacant stock of homes in the country in the order of 100,000 units.

While estate agents say that the market favours buyers, the Construction Industry Federation has warned that further prices cuts were unlikely.

"Prices have reduced by 30pc, and there isn't much scope for more cuts. A lot depends on the return to normal financial arrangements," a spokesman said.

Friends of the Irish Environment director Tony Lowes said the glut of new homes had "virtually emptied" some rural villages. "This has produced a very strong social impact because people living in these villages find they have no neighbours any more," he said.

The situation was criticised by the Labour Party, which said the pace of development in rural areas was "never sustainable".

"These estates were built by developers who clearly set out to make a profit and the position has changed. There should be no intervention in the housing market in what we would see as a normalisation process," the party's housing spokesman Ciaran Lynch said yesterday.

"This is developer-led, it was never sustainable. There's a difference between building housing estates and building communities."

Meanwhile, new figures show thousands of people have shown interest in securing a Government-backed mortgage which allows people on salaries of at least €40,000 to borrow up to €285,000 -- a maximum of 92pc of the value of the property -- from local authorities.

In one week, 4,500 people visited the Homechoice Loan website, with 583 registering an interest in availing of the scheme.

Report by Paul Melia, Stephen O'Farrell and Caitrina Cody - Irish Independent Newspaper.

Tuesday, 28 October 2008

When The Going Get's Tough - The Polish Get Going - Poles Flee Ireland...

Poles flee ailing Irish economy...

When the European Union expanded eastward in 2004, Ireland opened its doors to workers entering from former communist states to help maintain record economic growth. Now, immigrants are heading for the exit.

The number of people leaving Ireland next year will outstrip those moving to the country for the first time in 14 years, according to Economic and Social Research Institute in Dublin. The biggest exodus will be among the 170,000 workers who arrived the past four years from Poland and other east European states.

''It's a very hard situation,'' said Artur Kawczynski, 30, who lost his factory job in Galway on Ireland's west coast 10 days ago. ''I rang my friends in Poland to ask what job opportunities there are like.''

Immigrants like Kawczynski fed the manufacturing and building booms that helped double the size of Ireland's economy during the past 10 years and made it the most dynamic in western Europe. Now the seizure in credit markets has plunged the country of 4.4 million people into its first recession in two decades, pushing unemployment to an 11-year high. Economic growth remains above 5 percent in Poland.

As many as 30,000 immigrants have already left Ireland over the past year, with a further 35,000 set to exit next year, according to estimates by Jim Power, chief economist at Friends First, a Dublin-based insurer. The economy shrank 0.5 percent in the second quarter and by 0.3 percent in the first.

''People are responding to changes in the economy,'' Power said. ''In a small country like Ireland, where immigrants have made such a major contribution, it's far more visible that in a bigger economy such as the U.K.''

'More difficult'

Poles have changed the face of Ireland. Bars sell Polish beer alongside Guinness; butchers advertise Polish sausages and pork cuts along with Irish beef.

In all, 1.2 million Poles may have moved to the U.K. and Ireland since 2004, according to Warsaw-based Centre for International Relations. Of those, 400,000 may lose their jobs, Krystyna Iglicka, a professor at the think-tank, said.

''When I came to Ireland, it was completely different,'' said Damian Sasiak, 25, who arrived four years ago from Poland. ''I remember when I changed a job three times in a day. It's much more difficult now.'

Sasiak reckons that numbers at the gigs he organizes for Poles have fallen by a third to 350 as people leave. Three weeks ago, Chaplins, a pub in central Dublin, closed the Polish-themed bar it ran on its first floor for two years.


At first, the bar, which opened three nights a week, sold Polish beers such as Zywiec and showed Polish soccer internationals was ''flying,'' said George Bourke, manager of Chaplins, which lies close to the banks of the River Liffey.

''As people started to get laid off and going home, business collapsed,'' said Bourke. ''Some nights we would have maybe two people up there.''

Zagloba, a Polish bar across the river from Caplins, stopped serving pierogi, stuffed dumplings, and golabki, cabbage rolls, after sales dropped by about 30 percent in recent months, according to Renata Nowak, its manager.

''Ireland is going down, while Poland is going up,'' said Slawka Gruzewska, 23, an air steward for Dublin-based Ryanair Holdings Plc, at the bar. ''Poland will be the new Ireland.''

In Ireland, immigrants hold 16 percent of jobs, according to Power. One in three catering positions is held by a foreigner, and they account for 16 percent of the construction industry.


''Jobs are likely to be lost in all these sectors over the next couple of years,'' said Power. ''People are going to go home or try other places where the economy is better.''

Poland's government is targeting average economic growth of 5.1 percent this year and next, boosted by EU investment in roads, consumer spending and building of new offices and apartment blocks. The unemployment rate there has halved to around 9 percent over the last two years.

By contrast, Irish joblessness is rising, led by a 18 percent decline in construction work in September from a year earlier. Irish house completions will fall 45 percent this year, as real estate prices slump, according to Dublin-based Davy, Ireland's largest stockbroker.

Not everyone is planning to leave. Hourly pay in Poland is 3.80 euros per hour, a quarter of the Irish level, according to the IW economic institute in Cologne, Germany.

''There are plenty of jobs in Poland,'' said Piotr Czyzewski, 34, who organizes mortgages for Poles in Ireland who want to buy property at home. ''But the money isn't so good.''

And the slowdown is benefiting at least some Poles in Ireland. Jolanta Czarnecka runs a tourist company in Dublin, taking her compatriots sightseeing all over Ireland.

''My customers say they want to see it now, because they're leaving in two months,'' said Czarnecka, 35, who runs Jolanta's Magic Tours. ''They're going home for Christmas and don't know if they'll ever come back.'' (Bloomberg)

Report by Dara Doyle - Irish Independent Newspaper

Sunday, 26 October 2008

Struggling To Get By In Ireland's Dust Bowl...

...echoes of the 1930s Midwest in the sorry mortgage belt tales of our estate agents...

"And there on the Texas plains right in the dead centre of the dust bowl, with the oil boom over and the wheat blowed out and the hard-working people just stumbling about, bothered with mortgages, debts, bills, sickness, worries of every blowing kind, I seen there was plenty to make up songs about. . ." Woody Guthrie

IRELAND is increasingly becoming a 21st century mirror of America's Midwest in the 1930s, a region that became known as the Dust Bowl after a series of devastating droughts, windstorms and economic depression tore out its very soul. In Ireland today, however, we have no Woody Guthrie, no one to sing us through this mess, no one who can somehow lift us out of the worst of times.

And who tells these tales of sorrow better than those in the Irish property market? Once the jewel in the Irish economic crown, it now lies forlorn, a victim not only of its own success but of the greed of all who fed off it and the unforgiving global economy who cared not a jot for our proud Tiger. The last week has been like so many others in this regard.

The country's largest estate agency chain, Sherry FitzGerald, has announced that it has cut nearly 8 per cent of its staff and shaved the working hours of several more in an effort to halt losses. Lisney slashed all staff pay by 10 per cent earlier in the year and more than 20 people have resigned from the company in the last six months. Even The Irish Auctioneers and Valuers Institute (IAVI), which represents over 2,000 estate agents, is freezing subscriptions for agents who are in difficulty and who have to drop out temporarily. To top a bad property week, last week one of the country's largest developers, Taggart Holdings, saw its Irish business units placed under administration and on Thursday it was revealed that luxury homes in north Dublin have had their price slashed in half from €1.4m in a bid to attract buyers. The horsemen of the property apocalypse have truly arrived and they are bearing gifts of woeful hue to one and all.
Yet amidst the proprietorial wailing and gnashing of teeth come stories if not of joy then ones of survival. Tales of true grit and tenacity in a world gone mad. Colliers Jackson-Stops have just sold No 5 Brighton Avenue in Monkstown, Dublin, after auction for a rumoured €1.9m. The house was bought for €2.5m in recent years and since then some €150,000 is said to have been spent on renovations. The home is a very spacious two-storey, garden-level, end-terrace period residence tucked away in a small, private, leafy street a short stroll from Monkstown Village. Two years ago punters would have paid just to view it.

Yes, €750,000 is a hit in anyone's language, but the amount paid is real cash money, and real cash is a rarity nowadays. It is the type of money that will buy you a fine house in the capital today and if you're lucky, without recourse to the begging bowl and the banks.

Robert Hoban, Associate Director of Savills tells the Sunday Independent of other such stories of survival. In the commuter belt he cites a large period house on a parcel of land which was bought within the last four years in poor condition but restored well so that it sold in 2007 for what seemed like a substantial profit. The purchaser then pulled out because of the market concerns. It was re-marketed in 2008, and sold for a sum equalling what the project cost the vendor. "No profit, but no loss either," says Hoban. "A good example of survival."

Yet for every tale of survival comes another two of submission. In the first eight months of 2008 average national prices fell by 6 per cent and overseas property tells an even sorrier tale. In the US the planned Chicago Spire, which has gained worldwide acclaim for its record-breaking height and twisting design, received a new moniker from American wags. "The Lien-ing Tower of Chicago" when it was revealed that the project now has three claims totalling $16.7m against the Spire's developer, Ireland-based Shelbourne Development Ltd. One prominent Dublin overseas agent told the Sunday Independent that they have received calls from clients who purchased property in Bulgaria two years ago for €65,000 and were now pleading with them to sell the apartments for as little as €45,000 -- a 30 per cent drop.

Was the Dust Bowl of 1930s America really that different from Ireland today? "It was terrible," said Nettie Featherston, who was spoken of by newspapers at the time as the matriarch of a Dust Bowl family. "We was living in a little old two-room house. And we cooked with black-eyed peas until I never wanted to ever see another black-eyed pea."

Black eyed peas? We're surely not there yet. Or are we?

Report by John O'Keeffe - Sunday Independent Newspaper.

Clueless! - Government Has No Idea How To Run Ireland...

Cowen has left this rudderless nation adrift on a sea of incompetency...

It took a while to fully comprehend what was actually going on. This was, perhaps, because it seemed so unlikely. Of course, the more we learn about these things, the more we know it is not that unlikely at all. But those were more innocent times. Those were times when we had that cosy assumption that the people in charge vaguely knew what they were doing.

Even if we have no respect for them or their intelligence, even if we disagree with their politics, in this country we generally assume that someone up there in government is vaguely managing things at some level of competence. If we don't think it's the actual Taoiseach or minister, we suspect that there are civil servants who've been running things for years and know what has to be done. After all, this is not some third-worldy banana republic. This is a well-turned-out, internationally accepted, sophisticated 21st century country. Someone must know what they're doing here.

But last week, over the course of a few days, that comforting illusion of some level of basic competence somewhere in the machinery of the state that would at least keep the country functioning from day to day disappeared. The phrase "staring into the abyss" has been overused in recent months. But in the last week, in Ireland, it really has felt as if we've been staring into the abyss. Because it became blindingly clear in the last week that the people running this country don't know what they're doing. Worse again, it has become clear that they don't know what to do.

That's a fairly serious state of affairs. It leads to only one conclusion; and that is that this Government must go.

The final straw was when it became apparent that the Government had even lost their ability to do the kind of basic book-balancing exercise that has been their response to every crisis they have faced so far. We had long given up on expecting any kind of vision, or leadership, or solutions, or imagination from these guys. We didn't even expect any political judgement. But if we thought there was one thing they could do, we thought they had that dull-but-worthy art of book balancing down to a fine art. Though they were lawyers on the surface, we knew they were at heart petty clerks, and we thought that at the very least they would be able to sign off the ledgers when their civil service overlords presented them. But it seems they're not even up to that anymore.

Of course, the unsettling feeling that there is no one in charge is nothing new to us. You will recall the peculiar, rudderless summer we had. The Government seemed to resolutely ignore the growing crisis in our own, and the world's, economy, and there was a very real sense over the summer that no one was in charge. The main political metaphor of the summer was of a Digestive hovering over a cup of tea, seemingly paralysed.

Of course, this kind of avoidance of reality could have been down to the kick in the balls that was the Lisbon Treaty. Lisbon was the Government's first big test. They turned it into a referendum on them, by wrapping their own reputations around it. This meant that the subsequent resounding No must have hurt their pride. Of course, it was probably this same pride, which looked to some like arrogance, that lost them Lisbon.

Refusing to get involved with anything as petty as a debate; refusing to credit ordinary people with the intelligence to comprehend Lisbon; and refusing to really respond to people's very real fears until it was too late, lost them Lisbon. In short, bullheadedness.

All Lisbon indicated was that Brian Cowen didn't seem to have Bertie Ahern's common touch. The full weight of the incompetence was yet to dawn on us. But there was worse to come.

The ensuing summer then seemed odd and slightly concerning but still we assumed that someone somewhere had a plan. After all, how could they all be so calm, off for the summer, while the world was falling part, if they didn't have something up their sleeves that made them very, very confident?

So, we waited, curious as to what would happen next.

In between all this, there were various other bits and pieces of sideline action that gave cause for concern. Mary Coughlan increasingly appeared like someone who should be locked up for her own protection. Brian Lenihan appeared like someone out of his depth and unhappy in his job, a job he seemed to like to publicly admit he didn't want and wasn't qualified for.

But still, our intrinsic faith in the fact that people must know what they're doing if they're running the country prevailed, and we waited expectantly for their summer holidays to end so they could unveil their big plan for salvation.

True, before they went, there was an announcement of the saving of half a billion, which was presented as the solution to everything, and which only a bunch of petty clerks like they are could have been so pleased with.

And then they came back. And the rest, as they say, is history. There was the triumphant securing of a pay deal, which involved offering the already largely overpaid and underworked public sector a 6 per cent pay rise, when what they were supposed to be doing was reforming them. As the rest of us wondered if we'd have a job in a year's time, the poor Government thought it was a great coup to get these guys to agree to a 6 per cent pay rise.

The bank guarantee was hailed a triumph too, though details of what it involved were slow to emerge. Despite initial all-night urgency -- again presented in heroic terms -- it took another few weeks for the deal to be clarified, and by then it seemed as if things had moved on. The bank deal certainly didn't unlock credit in Ireland, though it did, apparently, keep one, two or possibly three banks from having to shut their doors, for now at least. Lenihan has also managed to avoid nationalising the banks for now, which could be a good thing.

Like the old French Revolution, it's probably too early to say whether the bank guarantee has been a success or not. What would be safe to say, is that if it does prove a better idea than the plan being pursued by the rest of Europe, then that will come down to luck, rather than any genius on Lenihan's behalf.

All of which brings us neatly to the budget. While we had managed to keep believing that someone was half in charge up to the budget, it was that slow unravelling that really laid it all bare. Even when it came to their forte, petty clerkdom, these guys didn't know what to do anymore. They could now not be trusted with the most mundane of tasks. Never mind that the budget showed zero political judgement; never mind that it was a depressive budget geared towards contracting the economy when what we needed was expansion; never mind that it lacked any grand vision. The budget didn't even work at the most basic level. They hadn't figured out the details of half their wheezes, the savings from various capers were constantly chopping and changing.

There was no real commitment to the budget either. They backed down to practically every interest group who asked nicely. There wasn't even any real uproar about the lower-paid workers having to pay the 1 per cent levy. All it took was for one union official to call in to Leinster House and bang, it was sorted. Over the last week, and apparently it's going to continue for another week or two, various people just picked off the main points of the budget one by one.
Now, to the feeling that we have had for quite a while -- that we are ungoverned -- has been added a new feeling: that we are ungovernable. We just refused to accept their authority and they backed down. A Government that had already proved itself afraid of the public sector now showed itself to be afraid of everyone else as well. Not only did we lose confidence in them, they seemed to lose confidence in themselves. And it's not a pretty sight.

And now it is over. This Government, which never had a mandate in the first place, has lost whatever acquiescence we afforded it. We cannot afford them at a critical time like this. We know they can't govern and they are pretty much admitting it themselves now. Now it needs to end quickly, before things get even worse.

It would be easy to say we told you so. The media in this country could not rest until they dispensed with Bertie Ahern and got this current lot in. Some of us were ridiculed for not sharing this enthusiasm. They rest of them are starting to catch up with us.

You know how any time we contemplate changing the government, this voice in the back of our heads tells us not to bother, because there's no alternative? We need to override that voice this time. Of course one is reluctant to tell the Government to go, given the lack of any promising alternative. But surely now we must all agree that the devil we don't know couldn't possibly be any worse than the devil we know. It's not just all that they've done wrong, it is the fact that it is difficult to point to one thing, no matter how basic, that this Government has done right.

Report by Brendan O'Connor - Sunday Independent Newspaper.

Friday, 24 October 2008

Ireland's Daft Property Scene - More Dublin House Prices Slashed...

Desperation as luxury home prices halved...

A DEVELOPER of luxury homes just 11km from Dublin Airport has been forced to slash the €1.4m sales price in half in a bid to attract buyers.

Detached five-bed houses at Lynnwood in Ballyboughal, in north Co Dublin, originally went on the market for €1.4m.

The 3,013-sq-ft (280sq-m) houses were first reduced by €450,000 in a bid to attract purchase-shy buyers.

Then on Tuesday, the price was cut back another €100,000 to €850,000.

By late yesterday, developers Area Building dropped the price by another €100,000 to €750,000. The move to cut the price in half came days after leading developer Taggart was forced into administration.

Selling agent Paul Tobin said the homes were fully fitted out to a high standard.
He insisted that the developer had spent €1.1m building each of the houses in the small scheme, once land values and construction costs were added together.

Mr Tobin said the developer had been trying to sell the houses for months and was now anxious to release the money tied up in the development and move on to other projects.

Just up the road at The Grange in the same village, €300,000 has been knocked off the price of three- and four-bed houses to between €795,000 and €975,000. The 2,755-sq-ft (255sq-m) houses are fully fitted out, with plasma screens in the bathrooms.

Selling agent Darren Kelly of Property Team Noel Kelly said the cuts reflect a tough market. And the price cutting by builders gathered momentum yesterday when the developer behind a huge housing estate in Dublin slashed the prices.

Report by Charlie Weston Personal Finance Editor - Irish Independent Newspaper

Stanley Holdings has cut €100,000 from the asking price for houses in its huge Belmayne development in north Dublin.

This means that 30pc has been knocked off the prices of the homes in the large housing scheme, which has been heavily promoted with adverts featuring scantily clad women.

About 40 houses have seen their prices cut at Belmayne. Four-bed houses are now down to €400,000 with three-beds reduced to €330,000.

Analyst Scott Rankin of Davy estimated first-time buyers will spend €2bn less on new homes this year because of job insecurity and a widespread feeling that prices will fall further.

Tuesday, 21 October 2008

Daft Property Ireland - 'Affordable Housing' More Expensive Than 'Unaffordable Housing'...

'Affordable housing' now more expensive than market...

WITH THE downturn in property prices, homes in north and south Dublin and Meath are on the market for the same or lower prices than similar homes under the affordable housing scheme.

Buyers can save €10,000 on €245,000 two-bedroom apartments in Phibblestown Wood, Ongar, Dublin 15, and €5,000 on €205,000 three-bedroom homes at Parnell Drive and Parnell Green, Ladyswell, Mulhuddart, by purchasing on the open market instead of through Fingal County Council.

Three-bedroom apartments at Bailis Village, Navan, Co Meath, available through the county council's affordable housing scheme for €233,000, are advertised at the same price on the open market, as are two-bedroom properties at Eaton Square, Rathcoole, in south Dublin, available through the county council for €220,000. By purchasing on the open market homeowners avoid the "clawback" aspect of affordable housing schemes. Clawback means that if a home is sold within 20 years of purchase, the local authority must be paid a percentage of the price.

Affordable homes are built under Part V of the Planning and Development Act 2000. Under the Act, developers provide land, money or 20 per cent of their residential development to the local authority for social and affordable housing. The local authority must pay the developer a fair price. The price is based on land value, construction costs and a reasonable profit for the developer, usually between 7.5 per cent and 15 per cent. This is the price which is then passed on to the homeowner.

Agreements on Part V between developers and local authorities may be reached two or three years in advance of the units being delivered.

In the past, because of the rapid growth in property prices, this has worked to the advantage of local authorities. However, some authorities have found themselves tied into legally-binding agreements under which they will pay more than the going rate for property. A spokeswoman for Fingal council said there is still interest in buying affordable homes in Fingal. They had 732 approved applicants on their affordable housing list. Some 79 per cent of applicants are single and 55 per cent are under 30 years of age. "Prices for units in Parnell are still quite favourable even in a declining market. Prices for Phibblestown Wood, which were provided to Fingal County Council through the Affordable Homes Partnership, are somewhat higher, although we have a very small number of those units for sale," the spokeswoman said.

A spokeswoman for South Dublin council said they were very conscious of the housing market, which was changing on a daily basis. The Department of the Environment said it would be open to the local authority to seek to renegotiate the price agreed with a developer where there had been significant market changes.

Report by FIONA GARTLAND - Irish Times

Ireland North & South United By Bridge Over Troubled Water...

The design of the first bridge across the border between the Republic and the North was revealed yesterday...

The 280-metre-long cable-stayed bridge will link Narrow Water near Warrenpoint in Co Down with Cornamucklagh in Omeath, Co Louth, and has been designed so it is safe for cyclists and pedestrians.

It is nearly 29 years since Narrow Water became synonymous with the single worst loss of life of British soldiers in the Troubles when two IRA bombs killed 18 soldiers. One civilian was also killed.

The bridge has a tower at each end. The higher 100-metre-tall one is on the southern side, which will have the Cooley and Mourne mountains as a backdrop; while the lower tower at 30 metres will be on the northern end and will compliment the Drumlin topography there.

Tony Dempsey, from consultant engineers Roughan O'Donovan, told councillors at meetings in Dundalk and Newry the criteria for selecting the bridge design included the impact on the environment and ecology as well as on the landscape and heritage.

He said it was designed as a 'tourist bridge' and cyclists, pedestrians, cars and coaches can use it, but heavy-goods vehicles will be discouraged.

A section of the bridge closest to Narrow Water will lift to let boats, including tall ships and other water traffic, pass by. It will span the Clanrye river as it prepares to flow into Carlingford Lough. Images of the bridge and full details of what is proposed will be on display in Warrenpoint and Omeath this week for feedback from the public.
Report by Elaine Keogh Irish Independent Newspaper

Sunday, 19 October 2008

God Save Us From Politicians & Bankers Playing The Patriot Game...

It was Samuel Johnson who famously proclaimed in 1775 that “patriotism is the last refuge of a scoundrel”.

What we have been witnessing has little to do with real patriotism — it is a phoney patriotism. In the circumstances, the more appropriate word is treason.

THE US Democratic vice-presidential candidate, Senator Joe Biden, says raising taxes is patriotic. Speaking in a nationwide TV interview, he proclaimed: “It’s time to be patriotic.”

Did the Yanks set the tone for this week’s budget? “This budget serves no vested interest,” Finance Minister Brian Lenihan told the Dáil on Tuesday. “It is no less than a call to patriotic action.”

In fairness to Government ministers, they took a 10% cut in their salaries to give some example.
Enda Kenny had called on all the politicians to cut their salaries. So the Government did give some example by cutting their own over-inflated salaries, but they offered little in the way of real leadership. People in a city who have a car park space provided by their employer will have to pay €200 a year for the privilege. Yet ministers and TDs will be paying nothing for their prime parking spaces at Leinster House. What kind of leadership is that?

The opposition could hardly have been more critical of the decision to introduce a means test for medical cards for people over 70. “It the most stupid, callous own goal ever perpetrated by a government on the elderly folk of this country,” Enda Kenny declared.

In terms of political sagacity it is hard to imagine a more astounding piece of ineptitude than the way the decision to withdraw the medical cards was announced. There was no proper explanation of who would be affected.

The actual figure for the cut-off was initially €173.50 for a single person living with a family or €201.10 for other single people and €298 for a married couple.

In realistic terms it meant the family was going to be saddled with responsibility for the health costs of the elderly parent living with them. Families, without any regard to their income, were going to be victims of extortion as an elderly parent was being held hostage in the name of patriotism.

Elderly people were suddenly terrified of becoming an immense burden on their families. The sense of national outrage was palpable. The lower limit on the people living with a family was scrapped and the overall limit was raised to €240.30 a week for a single person and €480.60 for a married couple.

These changes were a stark admission that the Government did not know what they were doing in the first place. Tánaiste Mary Coughlan defended the decision on the grounds that it is unfair that “well-off pensioners, senior civil servants, High Court judges, property tycoons, ministers of state and hospital consultants” should have medical cards regardless of their incomes. Of course she was right, but who the hell gave them the medical cards in the first place?

“This is a recipe for economic disaster down the road,” I wrote in this column on March 27, 2002. “Free medical care for the aged was introduced under the Medicare programme in the United States during the 1960s. It was a noble gesture. The people reaching retirement age were the men who had fought in the world war in the cause of American democracy. But now the system is in a shambles.

“Yet we seem determined to make the same mistakes with even less resources. Surely we learned that there is no such thing as a free lunch — somebody always has to pay. When the politicians promise free medical cards, they are not free. Somebody is paying for them, and ultimately everybody will pay because the medical card system will be run into the ground with the growing scale of abuse.”

Some people terminated their VHI coverage as unnecessary when they reached 70. They are now up the proverbial creek without a paddle because they trusted their Government. This must be rectified.

It is nothing short of a gross betrayal. And we are being given this hypocritical rubbish about patriotism.

It was Samuel Johnson who famously proclaimed in 1775 that “patriotism is the last refuge of a scoundrel”. What we have been witnessing has little to do with real patriotism — it is a phoney patriotism. In the circumstances, the more appropriate word is treason.

An equally outrageous aspect of the budget was the 1% levy on the earnings of people who do not even earn enough to be in the tax net. What they are being asked to pay means really much more to them than the 10% cut in the grossly inflated ministerial salaries. Since 2004 ministers have increased their salaries by more than 25% to a total of €225,196.58, along with their state cars, free diesel, free parking and other perks.

“It doesn’t take guts to confront the old, the sick and the poor,” Charlie Haughey declared during the 1987 general election campaign. It was the soft option then and he took it himself in the following months when his government introduced savage health cuts which meant that much of the savings were at the expense of the most vulnerable elements in society.

In 1967, Donogh O’Malley announced his ‘free’ secondary education proposal. The Department of Finance went spare because no financial provisions had been made for this. O’Malley was an astute, far-seeing politician who realised the measure would be immensely popular and that Finance Minister Jack Lynch would swallow the proposal once he recognised its popularity.
Democratic politics are all about giving people the kind of government they desire. Popular measures are seen as good politics. Time has proven that Donogh O’Malley was both popular and right. Much of the affluence associated with the Celtic Tiger economy was founded on the educational improvements he initiated.

Charlie Haughey took up the running by introducing a range of measures for the elderly, like free travel on public transport, and free television, both of which represented a possible loss of revenue but no increase in cost.

IN THE general election of 1973, Fine Gael and Labour came up with a joint proposal to abolish VAT on food. Everybody has to eat and thus a tax on food is particularly penal on the poor.
One could argue the same about housing. Everybody has to live somewhere and Fianna Fáil sought to upstage the opposition by promising to remove rates from dwelling houses, but it was seen as too little, too late at the time. Fine Gael and Labour gained power in 1973, but Fianna Fáil took it back in 1977 by promising not only to remove the rates on dwelling houses, but also to remove the annual road tax on cars.

Both have since been reintroduced stealth taxes whether they call them water charges or fees for rubbish collection or the annual motor vehicle tax. Too many freebies had nearly bankrupted the country.

Now Fianna Fáil is talking about backing large mortgages for people to purchase a house. This is supposed to be for young people to get on the property ladder, but don’t be fooled — it is to bail out the bankers and the property speculators, the people who have got us into the present mess.

The Government and the politicians who are propping them up are the same ilk as the greedy financiers. God save Ireland from this shower of bankers playing the patriot game.

Report by Irish Examiner Newspaper

Friday, 17 October 2008

Written In Stone...International Day For Eradication of Poverty - World poverty stone...

World poverty stone unveiled in Dublin...

A commemorative stone to mark International Day for the Eradication of Poverty has been unveiled in Dublin today.

The stone, which is situated near to the Famine memorial on Customs House Quay, was unveiled by Deputy Lord Mayor of Dublin Emer Costello.

The commemorative stone was commissioned by Dublin City Council and Dublin Docklands Authority and is inscribed with words from Joseph Wresinski, founder of the international human rights organisation ATD Fourth World.

The words - “Whenever men and women are condemned to live in poverty, human rights are violated. To come together to ensure that these rights are respected is our solemn duty” - were first inscribed on a commemorative stone laid on October 17th, 1987, on the Human Rights Plaza in Paris where the Universal Declaration of Human Rights had been signed.

Since then the same words have been used on more than 30 similar commemorative pieces around the world including the UN headquarters in New York and the European Parliament building in Brussels.

The text on the Dublin stone is engraved in Irish, English and French, and the stone was sculpted by Irish sculptor, Stuart McGrath.

The United Nations General Assembly adopted 17th October as its International Day for Eradication of Poverty in 1992, and the day is now observed in more than 100 countries to highlight the struggles faced by poor people throughout the world.

Speaking at the unveiling of the stone this morning, Cllr Costello said the erection of the stone so close to the Famine memorial would "link the struggles of Irish people living in poverty today with the struggles of the past".

"It will serve as a reminder to Dublin’s citizens that poverty knows no borders, is timeless, enduring, and is a global issue," she added.

Many of the world's leading crusaders against hunger have today voiced frustration that the global financial crisis had overshadowed a food crisis tipping millions toward starvation.

The World Bank predicts that high food and fuel prices will increase the number of malnourished people in the world by 44 million this year to reach a total of 967 million. Economists have also warned that the world's poor would be the most vulnerable to a global economic downturn.

Combat Poverty marked International Day for the Eradication of Poverty by highlighting the number of people experiencing difficulties in Ireland.

“There are currently 300,000 people in Ireland living in consistent poverty. This means they are deprived of basic necessities, such as adequate heat, food and clothing. Over one-third of those living in consistent poverty are under the age of 16. Clearly, the Government has a lot to do if it is to meet its own target of eliminating consistent poverty by 2016," said Kevin O’Kelly, acting director of Combat Poverty Mr. O’Kelly said the Budget announced earlier this week failed to demonstrate the type of radical thinking needed to eliminate consistent poverty.

“Unfortunately, last Tuesday’s Budget threatens to undermine the progress that has been made in recent years towards meeting poverty targets,” he said. “The income levy and VAT increases, for example, will hit low-income households the hardest, while the welfare increases are not sufficient to meet the rising costs associated with inflation.

Other activities being held across Ireland to mark the International Day for the Eradication of Poverty this year include the launch of a photographic exhibition from the Donegal Travellers' Project, an art project demonstrating the causes of poverty in the Connemara Gaeltacht and a public seminar and children’s exhibition in Tipperary town.

Report by CHARLIE TAYLOR - Irish Times.

"Written in stone - my ass! "

Since the Celtic Tiger boom most Irish people have become greedy, selfish & materialistic.

The downturn in the economy has people fretting over not being able to afford a new car, or the extra foreign holiday, this year. There are also many upset that they will have to make do with their six month old designer sofa a little longer even though they are "soooo bored" with the colour etc. etc.

The UN, a bunch of useless bureaucrats - could end world poverty if they wanted to.

The 17th October - so called International Day for Eradication of Poverty is merely a day when wealthy nations can pat themselves on the back and say how wonderful they are for dedicating a day to the millions that are starving.

So what are you doing today for International Day for Eradication of Poverty???

Tuesday, 14 October 2008

Irish Budget - Recession To Depression For Ireland - Budget 2009

Budget will 'turn recession into depression'...

POLITICAL REACTION: Fine Gael deputy leader and spokesman on finance Richard Bruton said this evening the Budget announced by Brian Lenihan today will "threaten to turn a recession into a depression".

“This is a Budget that is all about extra taxes for ordinary families, about extra charges for people, and about cutting capital spending,’’ said Mr Bruton.

“You are looking to make it tougher for people who are struggling to get by,’’ he added.

“There is no sign that you are aware of the pressure on people from fuel bills, the pressure on people who have lost their jobs.’

Labour leader Eamon Gilmore said it "mercilessly targets middle income families".

Speaking shortly after the Minister for Finance presented the Budget in the Dáil, Mr Gilmore said Mr Lenihan had failed to take any significant steps to protect the poor and vulnerable in the face of the worst recession facing the country for decades.

“Despite the fact that we are seeing the most serious increase in the numbers out of work ever recorded, there was not a single initiative in the budget to reverse the trend of job losses or to put people back into work or into education or training,” said Mr Gilmore.

“The people who will suffer most as a result of this budget are typically the nurse, the teacher, the office manager, the skilled tradesman, the small builder: people struggling to make ends meet, to pay the mortgage each month, to cover the cost of childcare or sending a child to university, to meet the cost of drugs for a sick child.

“These families will pay more in tax and will have to pay more for a range of public services and the full extent of these additional charges will only become clear over the next few days,” he added.

Mr Gilmore said that the Minister for Finance had done little to ensure that the “super wealthy” would make the contribution necessary to aid economic recovery.

Sinn Féin said this evening that the Government had failed to include job creation proposals or offer steps to protect vulnerable families in the Budget.

The party’s finance spokesperson Arthur Morgan said the 1 per cent income levy, VAT increases and fuel tax would “hit working families and small businesses who are already struggling to survive.

“The government promised to look after the most vulnerable but they didn’t. They said that they would ensure that top earners paid their fair share but they didn’t. They promised frontline services in health and education would be protected but that didn’t happen either. Change is possible and it should have started here today. It didn’t, and the state will be poorer off next year because of it. Rather than reversing the current recession the government seems intent on deepening it,” said Morgan.

“We knew that given the public finance shortfall, this Budget would be tough but Brian Lenihan’s first budget is a bad budget. Today people wanted to see the beginning of a three year plan to get the economy back on track. Central to that is creating and retaining jobs and addressing the shortfall in public finances. The Government fell far short on both counts today. They failed the leadership test,” he added.

Report by CHARLIE TAYLOR - Irish Times

Ireland Budget 2009 - Government Plans Savage & Painful Budget...

Nation braces for impact of Lenihan’s savage budget...

FINANCE Minister Brian Lenihan last night warned he was “taking the knife” to billions of euro worth of spending in an emergency budget that may also inflict “painful” tax hikes.

Signalling the grimmest government financial statement for a generation, Mr Lenihan revealed only the social welfare department would escape deep cuts.

He insisted his key priority was to try and stabilise the State’s finances in the most difficult circumstances “in living memory”.

Mr Lenihan’s blunt talking came as cabinet colleague Noel Dempsey indicated “painful” tax cuts would feature in the crunch economic statement.

Preparing the nation for what is likely to be the most savage budget in a quarter century, Mr Lenihan said he faced immense challenges.

“We want to stabilise the public finances in the most difficult circumstances in living memory,” he told RTÉ.

Transport Minister Noel Dempsey also braced taxpayers for increases.

“You can either borrow, cut expenditure to the very bone or you can raise taxes. The budget has to contain a little bit of everything. We are conscious some people can afford to take more pain than others,” he said.

A 1% to 1.5% levy which would be taken on the entire wage, rather than an income tax band increase, remained the most likely option with the Cabinet set to finally sign off on the budget package at a special 9am meeting today, at which ministers will decide whether or not to take a pay cut in solidarity with public sector workers.

Mr Lenihan agreed he had “taken the knife” to spending and said around €2 billion in cuts had already been found, bringing the deficit down to 7% of GDP. This was still well above acceptable levels, however, and needed to be trimmed further by savings or tax hikes.

He warned that “every facet of Government expenditure” had been examined in the pre-budget process.

It appeared a huge rise in health insurance, perhaps as much as 20%, could be triggered by charging patients on VHI and other schemes for use of hospital beds.

However, it seemed ministers were shying away from attempts to means test child allowance, but medical cards for the over 70s could be subject to such a move.

While the Department of Social Welfare would escape cuts, benefits may not rise in line with inflation.

A travel tax on all air passengers was set to suck some €400 million a year into the exchequer, while changing tax breaks for pensions could raise another €200m.

Health was facing swingeing cuts as the HSE budget would barely grow at all with a €120m reduction already announced for hospital building and repairs.

Big increases were expected on beer, wines and cigarettes, while the €1,000 a year childcare supplement for children under the age of six set to be cut.

Major transport initiatives such as the western rail corridor and Metro expansions faced uncertainty.

Report by Shaun Connolly, Political Correspondent, Irish Examiner.

Monday, 13 October 2008

Governments - Drinking At The Last Chance Saloon - Nobody's Buying A Round...

GOVERNMENTS have been drinking at the Last Chance Saloon when it comes to rescuing the world financial system, but it seems there is still a great reluctance to pay for the rounds.

Last night's announcement from the emergency meeting of EU leaders fell short of the all-out strategy now being advocated by most economists.

This would see governments putting fresh money (capital) into the banks so that they can begin counting and admitting all the capital they have lost through making loans which have not been repaid and, worse, buying loans and derivatives of loans at prices far above their real value.

How far above was horribly illustrated on Friday at an auction of bonds issued by failed investment bank Lehman Bros. They were sold at less than 10 cents on the dollar, which means those banks which bought the bonds have lost over 90pc of their money.

There is a general consensus now that losses in the global banking system are over a trillion dollars ($1,000 billion). It is an unimaginable sum but, to get a better handle on it, losses in the Irish banking system are estimated at between €10bn and €20bn. No-one knows for sure. No-one knows for sure anywhere, which is the root cause of the virtual closure of the banking system.

As those losses are taken on board, banks will shrink in size, their profits will drop and many will go bust, but how much and how many? This is why banks are holding on to the cash they have, and are unwilling to lend to others. Until that changes, the world faces the catastrophe of a failed financial system which would shrink not only banks but economies as well.

Different governments have tried different solutions, and none has worked. One reason why not, it is felt, is that the solutions are all different. Ireland's blanket guarantee of deposits and bank borrowings for six lenders was particularly unpopular, because it led to runs on the deposits of other banks which were not covered.

One of the main purposes of yesterday's meeting was to get EU governments to all act in the same way. It appears to have succeeded in this task, with an approved "toolbox" of measures governments can take. The box does not contain the deposit guarantees offered by Ireland, but Taoiseach Brian Cowen seemed optimistic that the scheme will get approval from the Commission in the next few days. Watch for the small print, though.

However, the key part of the agreement was that which said governments will take stakes in troubled banks, to ensure the smooth functioning of the eurozone economy. (It was essentially a eurozone meeting, but Britain was included because of its size. There is also the curious fact that the toolbox bears an uncanny resemblance to measures announced by the British government last week).

The agreement falls short of the co-ordinated, immediate re-capitalisation of banks which many analysts had called for. But it is widely expected that Germany, France and others will begin the process quickly. Mr Cowen said it would be "unhelpful" to speculate about what he will do, which will strike many in financial markets as very unhelpful. Uncertainty is the problem.

With a €15bn deficit yawning before Brian Lenihan tomorrow, one can see why the Irish Government does not want to think about finding another €14bn (to take a figure used by NCB Stockbrokers) to re-capitalise the banks. It is not quite the same as the Budget deficit, though. Because the money would be used to buy an asset -- bank shares -- it would not count under EU rules. There would be dividends and perhaps fees from the banks in return. And in the end, if it worked, the taxpayer might make a tidy profit. But the interest repayments on such as sum would be around €700m a year, and that is serious money.

The Government's hope still seems to be that it can merge one or two of the small, weaker lenders among the six, and that the bigger banks will take them over, under the protection of the guarantees. Not surprisingly, they are not too keen on the idea. And one reason for last night's agreement is that rescues like this have a habit of coming unstuck. It failed with Hypo in Germany and there are still doubts about the Lloyds TSB takeover of HBOS -- parent of both Ulster Bank and Halifax Ireland.

Last night the Norwegian government added to the pressure on governments to re-capitalise banks by committing the huge sum of $55bn. It intends to buy troubled mortgage debt with the money.

In a way, it is all quite simple. Until banks admit their losses, and start writing them off, we will not begin to get back to normal. They cannot do it without new capital. But banks don't want to write off such huge sums, and neither the markets nor governments particularly want to invest in banks in this state. But waiting for some softer option to arrive is no longer an option.

Report by Brendan Keenan - Irish Independent
Cartoon - Irish Independent

Sunday, 12 October 2008

The Devil's Triangle - Fianna Fáil, Bob The Builder & Banks...

The golden triangle – FF, the builders and the banks...

Despite last week's bail-out, some of the country's most ambitious redevelopment plans are still in jeopardy...

It was Fianna Fáil's best friend, Bob the Builder, who propelled the banks into the liquidity crisis
and caused the historic post-midnight sitting of the Dáil. After a decade of swaggering around the corridors of power and inside the Fianna Fáil tent, many of those feted builders are now expected to put their most extravagant plans on ice and sit out the recession, cushioned by the citizens' guarantee to the financial institutions.

"We're not so much talking about a golden circle as the golden triangle – Fianna Fáil, the builders and the banks," says Labour's Joan Burton.

Irish banks are owed €110bn by the property and construction sector. It accounts for €60 of every €100 that residents have on deposit. As 28% of all borrowings, it is significantly greater than the 25% construction proportion of bank lending in Japan when the banks crashed there in 1989.

Question marks hang over two of the most ambitious redevelopment plans for Dublin. As An Bord Pleanála's hearing of Seán Dunne's planning appeal for his Ballsbridge proposal continued last week, speculation was rife that, even if permission is granted, it will not go ahead until the economy improves.

The old Doyle hotels site cost him €379m three years ago and, should he be permitted to build his entire proposal, construction would cost almost half a billion euro more. In the event that construction financing was available, the problem would be selling 98,000 square metres of residential units in a slump. Ulster Bank, the non-Irish-owned bank specifically mentioned by the minister for finance when he discussed the extension of the bank guarantee, is believed to be the sole lender for the development.

The roadblock for the develop­ers is that, because of the massive indebtedness, overseas banks are less forthcoming in lending to their Irish counterparts. This type of lending is usually extended for short periods of about three months and, since the start of this year, some of the overseas lenders had refused to renew the arrangements. In other words, the builders had become such financial parasites, they devoured their own lifeline.

A risk assessment conducted by an international investment bank of AIB and Bank of Ireland found half of all loans for development were given to just 40 borrowers. Some 60% of AIB's total loans were taken up by the property sector and 70% of Bank of Ireland's.

A second trophy development hanging in the balance is the 24.5-acre Irish Glass Bottle site in Ringsend. It too smashed Celtic Tiger price records when it was bought in November 2006 by a consortium involving builder Bernard McNamara, financier Derek Quinlan and private clients of Davy stockbrokers. Anglo Irish Bank, the country's third biggest bank, has lent €288m for the project which envisages 2,166 apartments. The auguries are not good. Another developer, Liam Carroll, applied for permission to convert his brand new apartment development at the old Gasworks into a hotel, just down the road from the IGB site, when he failed to offload the apartments. Davy's clients put up €52.25m of the purchase price with McNamara's company lending it €62.5m plus a personal loan of €101,000. The starting date for construction – which will cost as much again as the purchase price – is next April. Watch this space.

Of the six institutions rescued by the government's decision last Monday night, AIB has the biggest loan book for the construction and property sector, at €30bn. Bank of Ireland has about €14bn. Irish Nationwide has nearly €10bn. Probably the most vulnerable of all is Anglo Irish Bank, the third biggest Irish-owned bank which described itself as "a relationship bank" but is more popularly known as "the builders' bank" and "the bank for big fish."

It is exclusively engaged in commercial lending and, though it has just 30,000 customers, its loans, primarily to the property and construction sector, come to €70bn. It is no surprise Anglo Irish was the one said to be closest to the precipice of ruination last Monday when its share price plummeted by 47%. The country's richest person, Seán Quinn, owns 15% of the bank's shares, along with his family.

Among Anglo Irish's big-name borrowers are Liam Carroll for his vast Cherrywood site in south Dublin, Bernard McNamara for his purchase of the gigantic Elm Park in Booterstown, Seamus Ross's Menolly Properties and Treasury Holdings for the refinancing of the Ritz Carlton Hotel in Enniskerry. It is also the foremost lender to Pierse Construction.

Report by Justine McCarthy - Sunday Tribune

...Forget the golden triangle – FF, the builders and the banks - more like the Devil's Triangle

(Devil's Triangle another name for Bermuda Triangle.)

Friday, 10 October 2008

We Are Where We Are - On The Road To Nowhere - A New World Order...

Where do we go from here?

As the State stepped in this week to avert a collapse of the Irish banking system, Joe and Mary citizen were left pondering a very uncertain future...

'WE ARE WHERE we are. It's time to move on. Just do the vote. Just . . . just get it done. Okay?" blustered a Wall Street trader last Monday, minutes after the US Congress rejected the $700 billion (€505 billion) bailout for the banks.

The CNN interviewer persisted with a question about the rage bubbling under Main Street USA. The tetchy trader ignored it. "We are where we are," he repeated. "It's time to move on. Just do the vote."

Sound familiar? It should. The mantra was snapped up on this side of the Atlantic this week and used to quell the rabble demanding that the Irish masters of the universe be made to account for themselves before Ireland Inc's reputation was sold to save their necks. "Listen. We are where we are," snapped one cheerleader dismissively, "all that's for another time." "Look," said another, as if addressing a slow child, "this is where we're at. We'd all have been back to living on turnips without this [€400 billion] Government guarantee."

It was classic arrogance, the kind that assumes that the Main Street rabble just don't get it. "Wall Street has not grasped the fundamental reason for the emotive reaction of the people," wrote Kansas business lecturer Kara Tan Bhala to the Financial Times . "For years, people have watched (with some fascination, admittedly) the extravagant lifestyles of the uber-wealthy. The extreme wealth was accepted with little envy because people believed the success of the financial elite was a result of hard work and expertise, and that it was achieved on a level playing field. Instead we discover that much of this fabulous wealth was garnered through a system of smoke and mirrors . . . The bailout is difficult but not impossible for the country to accept. Main Street, in the main, is comprised of good people. Perhaps they simply want an apology for rotten behaviour and the mess it caused."

To put that €400 billion in perspective: it would be more than enough to eliminate starvation and malnutrition globally by 2015, according to World Bank estimates; or it could feed and educate the world's poor for seven years. It is the equivalent of more than €100,000 for every Irish man, woman and child and well over double our GDP.

It is not "costless", as some have argued; Government borrowing will cost more because of it. Sure, it will safeguard bank investors but it will not cover the banks' bad debts. And these are the great imponderables. The Financial Times noted that, at Anglo Irish Bank, "80 per cent of the loan book is secured against fast-fading UK and Irish property; Bank of Ireland (71 per cent) and Allied Irish (60 per cent) are not a whole lot more diversified . . . As AIG's implosion showed, guarantees can be cheap to give but ruinous to honour."

On Tuesday, a former director of Hibernian insurance group, after lunch with a group of current and retired fund-management people, admitted that the cost to the taxpayer of the guarantee was "unknowable". "The only thing you can say is that it would be much worse for the consumer if we don't do it," said Eddie Shaw. "But make no mistake, this is the end of the financial system as we know it. It's not the end of capitalism but we're certainly moving into capitalism phase two. And it's going to have to be better."

For Joe and Mary Citizen's perspective, reel back a few weeks to September 18th and a Liveline programme centred on the security of savings. Media reports suggested that a bunch of nervous nellies were prodded into a stampede by Joe Duffy; in fact, the show featured one worried caller after another, who had already withdrawn their money from banks, and were stuffing it in the mattress or burying it in the garden. One woman had shifted hers into prize bonds. She was one of many, as anyone attuned to the conversation of middle Ireland would have known. A national crisis of trust was evolving. The banks and the Minister had been adamant that Irish banks' fundamentals were sound, yet any sensate creature was aware that the banking system across the western world was teetering. A salient feature of financial reporting over several months was the lack of trust between banks; they were even refusing to lend to each other. Foreign banks, in particular, didn't want to lend to ours. It wasn't due to a sudden turn against red hair and freckles, but because they suspected that vast dung heaps of toxic, property-related debt were steaming, undeclared, below the surface.

A couple of days before the Liveline show, the business editor of The Irish Times , John McManus, wrote that what we really needed to know was "whether the banks are refusing to face up to the problems in their property loan books, and whether the Central Bank is letting them away with it?" In short, absolutely no one - neither experts nor amateurs - trusted the banks or their guarantees, a point made by Joe Duffy.

THE INFORMATION VACUUM was real, dangerous and entirely the responsibility of the financial authorities and politicians. When an An Post employee popped up on Liveline with the useful reminder that An Post savings were State-guaranteed, was it Joe Duffy's duty to gag him? Some thought so.

In a highly unusual move, the Minister for Finance himself phoned the director-general of RTÉ, Cathal Goan, to express his outrage. According to remarkably similar reports across several Sunday newspapers, Brian Lenihan had taken the initiative when alerted by officials in his Department that the Financial Regulator and banks across the country were being "inundated" with telephone calls from alarmed customers after the programme (surely that's what the banks and the regulator are for?). In fact, people with entirely rational concerns were moving to protect their assets. Some €50 million was lodged to An Post's savings schemes in a single day.

Only then was the State guarantee on bank deposits raised to €100,000. In other words, it took a talk show to force attention onto the legitimate concerns of Joe and Mary Citizen.

It would take only 11 more days for everyone's worst fears to come to pass. The Irish banking system would have "totally collapsed" this week if the Government had not introduced legislation to underwrite it, according to Tánaiste Mary Coughlan.

So the rabble were right after all. It was another nail in the coffin of public trust, one less reason to trust the leadership the next time they come knocking.

And still no one is any the wiser. The optimists argue that the State might actually make a profit on the bank guarantees, the pessimists that troubled banks might be tempted to take a few big bets on the back of guarantees signed by the Minister for Finance (that is, you and me). Prof Morgan Kelly of UCD spelt it out: "Suppose that you are a bank that has lent €100 million each to 10 developers who are having problems meeting their repayments. What you do is bundle the loans into one asset and sell it, with Brian Lenihan's signature on the bottom, on financial markets for €1 billion. When the borrowers default, the taxpayer will be left taking up the tab." Expect bank shares to soar and the cost of Government borrowing to rocket.

It was precisely this bundling of dodgy loans into assets and their transmogrification into credit derivatives that triggered the US credit crunch and flattened Americans with a $700 billion bill for the Wall Street bailout (or "rescue plan", as the spinners took to calling it after Congress said nay). But it is the information vacuum that continues to niggle.

"I don't mind working in a recession, I've done it before - but this one feels different," says Nora Casey, owner of the Harmonia magazine group. "All summer there was the sense that this recession was to do with people overstretching themselves in property. I didn't think that would impact on us. There was a lot of talk about, but absolutely no leadership . . . Now this plan of ours feels very last-minute. The banks were looking for a big sign of confidence; our Government adopted a position of 'let's say nothing' and we became more and more uncertain. Now there's the bailout, and I understood on the one hand where it was coming from, but I'd also ask: why didn't we do it last week? There's a feeling that we've given over something that's not in our gift."

"People are nervously ignorant," said another well-read businesswoman. "There is a sense of emergency combined with a national hole in understanding about what's going on. There is no one person in authority attempting to explain how we should be feeling about this."

Ray Kinsella, professor of banking and financial services at UCD, sympathises: "People cannot internalise the magnitude of this crisis, which will metastasise into the mother of all recessions. We are headed for a place we don't want to go and what people want is some kind of direction. They are fearful, they are seriously ticked-off. They need information and they need reassurance . . . I'd be firmly of the view that there is a clear and pressing need for dialogue between the people undertaking something of such enormous importance [the €400 billion bank guarantee]; that means between people like ourselves, ordinary people going about our business, trying to live our lives, and the institutions."

JOE AND MARY CITIZEN care little that the same institutions are phoning builders and developers several times a day, demanding an update on the sale of the wife's jewellery or the 4x4, the helicopter, the Portuguese villa or the larger house of several, which may also be the family home (all of which is happening).

They won't lose sleep, either, about the travails of the glitzy charity-ball crowd, whose events often reflected the most overblown, look-at-me excesses of the boom. But next year's Toothfairy Ball has been cancelled and the million-plus it raised for three charities, including Adi Roche's Chernobyl Children's Project, will be sorely missed. "Even last June, I felt the auction was like pulling teeth. There was no money in the room," said Roche. As a result, the charity will have to dip into its emergency reserves for the first time in its existence.

Joe and Mary probably won't shed a tear either for Coca Cola, one of the companies that have decided against a Christmas party; or for the Dublin company director whose usual corporate gifts of magnums of Cristal champagne and Lynch Bages will be replaced by "a couple of bottles of something tasty and thrifty".

But what Joe and Mary cannot ignore is the distress of friends who are being squeezed by the banks, being turned down for minuscule loans, being tormented as their businesses struggle through hard times because the banks were not doing what they were there to do (as the Taoiseach pointed out on Thursday).

As the week closes on what he called a defining moment in our history, many are seeking a silver lining. Could it be that we've seen the last of the Gordon Gekko wannabes and the "greed is good" free-booting philosophy that has underpinned the past 15 years? They're unlikely to go quietly.

"It's almost as if we need a transplant into our national psyche - to trust and be trusted," says Prof Ray Kinsella. "In the words of a former economic adviser to NatWest, 'I joined a profession and I've ended up working for an industry'. A profession is trust-based, but industry commoditised all kinds of personal relationships and pushed out trust. The vast majority of bank employees are decent, good, highly moral people. The problem is that they work in a business model that is highly dysfunctional, where people are isolated and their value is measured in terms of money and stock options. They're going to a place where they can't be themselves, where they may be called upon to leave their own minds and personalities in a briefcase outside the office door."

To Kinsella, the challenge is to restore the balance between the four elements - depositors/customers, employees, shareholders and society - of banking. "Back in the 1900s, there was a shortage of capital, which meant the whole business model was skewed and rewarded the providers of capital [the shareholders] disproportionately, compared to the customer, employees and society. The whole model fixated on them, driving the obsession with quarterly earnings. People at the top were only rewarded for maximising shareholder value, the value of investments. Now, although capital is much more plentiful, the model remains the same; as soon as you get one set of targets by this quarter, it's all about next quarter's earnings. But as a model, it's economically redundant and creates all kinds of perverse effects.

"You're always looking for that little bit more; you develop that target-fixated mentality, that perverse mindset. It crowds out the person, the depositor, the mortgage-holder, the employee - and that is always, always wrong. Free markets are good and important for many reasons but that model has subverted the markets. The purpose of markets is not to make a small number of people extremely rich - it's about inclusivity. Over the years, you had banks advertising, saying to their customers, 'we are your friend, we are your safe haven, we are here to be at your service'. The real breach of trust was in that gap that was created between the perception created of front-line staff and the reality behind the counter. And it's this that has brought the system crashing down on everybody, including themselves."

And yet, he says, "the worst thing you could do is assume regulation will solve all the problems. Don't forget that this collapse has happened within the most prescriptive regulation regime - Basle II - ever known. Basle II was implemented last year after costing hundreds of millions over 10 years to set up, and was meant to be the last word in re-inforcing banks against failure. Yet it offered no protection, and that should tell you that regulation alone is no use. In the very same period that the incredibly complex, unprecedented regulatory system of Basle II was being created, the people within the system were creating the nuclear bomb that exploded this week. You simply can't regulate people into behaving ethically.

Ethics are about obedience to the unenforceable. It's not about being good all the time; it's about seeing outside of ourselves. You have to get inside the corporate mindset and convince them that an ethical approach is much more likely to be sustainable, to be profitable." He sees the two-year duration of the Government guarantee as "an incredible opportunity to reconfigure, to rethink our values and how we want our institutions to behave and to relate to us. It's really important that Irish banks remain in Irish ownership. We have to embrace this opportunity - let's use it."

And if that doesn't work? The Guardian made the case this week for a national bank to be made available through the post office network; safe, local, more democratic. How bad could it be?

Report by Kathy Sheridan - Irish Times

We are where we are - on the road to nowhere - a new world order!

Wednesday, 8 October 2008

Madness - Our House Price Crash - Spitting Image...

Classic song by the spitting image TV show to the tune of the Madness song - Our House.

Based on the financial situation of the time, rather like that of today.....


Dad believed what Maggie said
Get a mortgage buy a home
So dad took out a great big loan
For a while there we were chuffed
Now the market has collapsed
And we're absolutely stuffed

Our house, in the middle of a slump
Our house, no one wants to buy this dump

Dad is desperate to sell
But now our homes worth even less
Than a pension from Maxwell
Our living room's a mess
Full of magistrates and bailiffs
Trying to repossess

Our house, in the middle of the boom
Our house, it was worth a small fortune
Our house, left us in a dreadful state
Our house, why the hell'd we decorate

We really caught a cold
Nowhere we can go to now
All the council houses have been sold
Our dads taken some stick
He's still voting Tory though
By God he must be thick

Our house, didn't work out like we planned
Our house, prices dropped by fifty grand
Our house, threw us out and changed the locks
Our house, it is now a cardboard box

Tuesday, 7 October 2008

How Ireland Will Destroy the Euro? - New World Order Or New World Disorder? - Our 100th Post...

Ireland's decision to guarantee all bank deposits will contribute to the demise of the single European currency, because it will erode the euro's credibility...Hugh Hendry, chief investment officer and Partner at Eclectica Fund, told CNBC on Thursday...

Watch the video:

Promises of lavish spending such as this and others being discussed in Europe will erode investors' confidence, Hendry warned.

The plan pledges to guarantee the liabilities of six Irish-owned banks totaling some 400 billion euros ($565 billion), more than twice the country's annual gross domestic product.

"The decision, if left to stand … my prophecy is it will bring down the currency. The euro is not a tenable currency if you have politicians making such decisions. The reality is there is no such thing as a free lunch"...

Irish lawmakers backed the plan and the government said it may be extended to foreign banks with retail units in Ireland, but it has raised questions in Brussels and London about competition and state-aid rules.

Promises of lavish spending such as this and others being discussed in Europe will erode investors' confidence, Hendry warned.

"McDonalds has got less chance of going bust than the British government," he said. "When our government comes to issue this sea of money they're going to pay through the nose … if we can't constrain that behavior, we're going to pay for it."

"We're on the verge of a sovereign debt default in Europe."

The current crisis stems from central banks easing monetary policy and flooding markets with liquidity to kick-start the economy after the dot-com bust in 2000, Hendry said.

"The reality is we should have had a stinking recession at the turn of the century. We burnt and destroyed lots of capital, we should have suffered from it," he said, adding that former Federal Reserve chairman Alan Greenspan thought he could "abolish the economic cycle" by inflating house prices.

Report from CNBC

Ireland's possible destruction of the Euro - is this part of a "new world order" or a "new world disorder"???? Comments welcome.

Monday, 6 October 2008

World Banking Crisis - The Money Masters - New World Order...

So why are we in this international economic crisis - it's no accident - it's been planned for some time.

Meet the money masters...

"The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private ... all » hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..."

THE MONEY MASTERS is a non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money.

The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers.

Segments: The Problem; The Money Changers; Roman Empire; The Goldsmiths of Medieval England; Tally Sticks; The Bank of England; The Rise of the Rothschilds; The American Revolution; The Bank of North America; The Constitutional Convention; First Bank of the U.S.; Napoleon's Rise to Power; Death of the First Bank of the U.S. / War of 1812; Waterloo; Second Bank of the U.S.; Andrew Jackson; Fort Knox; World Central Bank; Loose Change 911 truth police state globalists NWO New World Order Federal Reserve Alex Jones Aaron Russo America From Freedom To Fascism zionist IMF BIS John Perkins 911 911 Globalism bilderberg Rothschild Rockefeller Schiff Warburg illuminati bohemian grove idi amin freemason

New World Banking Structure on Order...

BBC panel discuss the ramifications of the passing of the $700 billion 'Bailout Bill' in the US, and the impact that will be felt in Europe and the Middle East...

Sunday, 5 October 2008

Ireland's Economic Crisis Deepens - 2 Billion Euro In Budget Cuts Planned...

Budget cuts of 2 billion euro as economic crisis deepens...

But property developers seek hundreds of millions in refunds due to value losses...

FINANCE minister Brian Lenihan is looking for fresh spending cuts of around €800m for next year, on top of the €1.3bn reduction that has already been signed off by ministers in estimates negotiations.

The grim news comes as it emerged this weekend that Ireland's property developers, who made millions in the boom, are seeking tax refunds of hundreds of millions of euro after writing down the value of their land banks and other assets. This threatens to drastically reduce the corporation tax receipts the Revenue Commissioners were banking on.

With September tax returns expected to be very bad and the economic climate rapidly deteriorating, a further 1.5% reduction in 2009 spending is now up for debate. This would bring planned cutbacks in current expenditure for next year to more than €2bn.

"It's very grim. Two weeks after finance sought cuts across the board, they returned and told the departments that the situation had got worse and there was now a requirement for deeper cuts," one senior official said.

If a further 1.5% reduction is delivered, the overall cut in day-to-day spending for next year will be close to 4% – around 7% when inflation is factored in. The cutbacks will be discussed at today's special cabinet meeting, with informed sources saying there remains a large number of issues "to be thrashed out" in advance of budget day.

Although the government will not have key information on business tax returns for a number of weeks, it is likely to have to plan for a budget deficit in the region of 5.5% for 2009 – smashing through the EU's 3% rule.

Lenihan is said to be determined that each euro borrowed offers a long-term benefit for the economy. A potentially expensive voluntary redundancy scheme across the public service would fall into this category. The budget will include a voluntary package for HSE employees, and Lenihan could also use his speech to 'plot a course' for how this could be extended across the public sector in a highly targeted manner.

Informed sources say it is inevitable that taxes will rise in the budget. They believe tax credits and bands will not be index linked for inflation – resulting in income tax increases by stealth. Asked would new forms of taxation such as carbon taxes be examined, one senior political figure said: "Everything is on the table".

Informed sources said negotiations on spending plans were particularly difficult with the departments of health, transport and education. Agriculture and foreign affairs are the hardest hit of the government departments.

Well-placed sources said that, while there was some degree of realism across the public service, there remains some resistance and "a fair amount of empire building".

Report by Shane Coleman, Emmet Oliver and Martin Frawley - Tribune

Thursday, 2 October 2008

New World Order - Irish Banking System Collapse - Irish Welcome New World Order To Ireland...

THE Irish banking system would have “totally collapsed” without the Government’s €400 billion crisis guarantee plan, the Tánaiste warned yesterday.

Mary Coughlan made the claim as opposition parties attacked the rescue bid’s “vagueness”.

The enterprise, trade and employment minister insisted failure to act would have tipped Ireland into economic meltdown.

“We would have found ourselves in a different set of circumstances if we had not brought in this legislation. We would have undermined the system of banking and it would have totally collapsed,” she told the Dáil.

Ms Coughlan was responding to demands from Labour leader Eamon Gilmore to explain exactly how much taxpayers were expected to put at risk to cover the rescue plan, and what banks would be charged if they take up the Government’s offer to cover their liabilities.

“This country is being asked to go guarantor for the banks and in effect we are being asked to put up the deeds of the country as security in doing so. “How much are we being asked to guarantee? Figures floating around have ranged from €300 billion to €500bn,” Mr Gilmore said.

The Labour leader ridiculed the Government’s apparent inability to give firm financial answers.

“What are we being asked to guarantee? No member of the House or member of the public would walk into a bank and sign a guarantee for anybody, even a close member of the family, without knowing how much he or she is going to guarantee and would certainly not sign it in circumstances where it was open-ended, with no limit to the guarantee.

We need to know exactly what we are signing up to. It is a blank cheque for the banks,” he added.

Mr Gilmore attacked the Tánaiste for not stating in the legislation how much banks would be charged for getting the state to stand over their business activities.

“The charge applies only if the guarantee is called in. It is like having an insurance policy where one has to pay the premium only on the day one makes a claim. What is this charge and how will it apply?” he asked.

Ms Coughlan, who was standing in for the Taoiseach at Leaders’ Questions while Brian Cowen visited Paris, said there was little risk for the taxpayer, as the assets of the banks involved in the crisis plan were €80bn more than their liabilities.

“Regarding a fee, that is a matter for discussion with the Central Bank, which will determine what the fee will be,” she continued.

“...We are facilitating a guarantee that we hope will never have to be called in,” she said.

Fine Gael leader Enda Kenny expressed concern the Government had not properly thought through the impact of the rescue bid on banks operating in Ireland, but who were not covered by the deal.
Report by Shaun Connolly, Political Correspondent - Irish Examiner.

...So the country is going guarantor for the Irish banks and Central Bank will ultimately decide how much it will charge Ireland???

We are witnessing the demise of Ireland as we know it - the country has effectively been signed away - and without most Irish people even realising it!

...I wonder why the concept of "new world order" for Ireland comes to mind???

Wednesday, 1 October 2008

Financial Crisis: Everything You Need To Know...

Financial crisis...the main issues behind the government's decision to guarantee bank deposits...

Q: Why did the Government guarantee bank deposits?
A: It had no choice. After yesterday's collapse in bank shares and the rejection of the Paulson bank bailout plan in the United States, the Government had to move.

With Irish banks paying a huge premium to borrow money from foreign banks our entire financial system had come within a few hours of completely seizing up.

Q: How safe are my savings?
A: After this morning's move, the savings of bank depositors are now 100pc state-guaranteed.
This means that savers who have money deposited with the six Irish banks -- AIB, Bank of Ireland, Irish Life & Permanent, Anglo Irish, EBS and Irish Nationwide -- can sleep easily in their beds at night.

Q: Which banks aren't covered by the guarantee?
A: None of the foreign-owned banks are covered by the guarantee. These include Ulster Bank, NIB, First Active, Bank of Scotland, Halifax and IIB Bank.

Q: Is there anything I should be doing?
A: If you have money deposited with one of the foreign banks operating in Ireland, it might now be a good idea to switch it to one of the Irish banks covered by the State guarantee.

Q: What are the chances of an Irish bank going under?
A: By guaranteeing their deposits and wholesale funding, the Government has ensured that an Irish bank won't go bust. But this morning's move does no more than buy time for the embattled Irish banking system.

The fundamental problem, one of massive over-lending to a property sector where values have fallen by at least a fifth, remains unchanged.

There will have to be a major restructuring of the Irish banking system before the Government guarantee expires in two years' time.

Q: Are the Irish banks now vulnerable to takeover?
A: Almost certainly yes. While the Government will do everything in its power to maintain the independence of AIB and Bank of Ireland, it is a different story for the smaller Irish banks.

By the time the guarantee expires in September 2010, most if not all of these will have found new owners.

Q: How exposed is the Irish taxpayer by the guarantee?
A: Massively. The Government has now unconditionally guaranteed over €380bn of bank depo-sits and inter-bank borrowing. That's more than twice the value of our total economic output.

If the Government has to pay out even a tenth of the amount which it has guaranteed, the national debt would double.

Even more worrying is the fact that the Government hasn't disclosed the terms and conditions on which it is providing this guarantee to the banks.

Q: What does the guarantee mean for next month's budget?
A: Brian Lenihan has now underwritten almost €400bn of bank deposits and inter-bank borrowing. That's over six times the amount of money the Government will spend this year. The guarantee makes nonsense of the pre-Budget arithmetic.

Q: What does the guarantee mean for bank shareholders?
A: Irish bank shares soared on the announcement of the guarantee. This is good news for anyone who is a member of a company pension scheme or has a private pension plan, as bank shares make up a large proportion of most pension funds.

Q: When will this instability end?
A: Not any time soon.
Until the Paulson package is finally passed by Congress this crisis is going to get worse not better.

Dan White - Evening Herald