Joseph Morgan in and on Ireland

April 16, 2010

Time to do some work

Filed under: Sound Bites

 

I will be ‘off air’ for the next month or so as I have my finals in May (and some seriously heavy assignment delivery between now and then) and then need to break the back of my thesis before the end of June so that I know for sure I am on track to deliver well in time.

I hope to be back posting some time in July. Best wishes, Joseph

 

A few ’Parthian arrows’ before I go though:

 

I’ve been nominated for an award!  emoticon The all-Ireland Smedia awards to be precise. I have a nomination for ‘Best Film Script of the Year’ - about the only non-journalism category in the awards! They take place on Wednesday, 21st April so wish me luck! I’m up against four other finalists. Black suit, black t-shirt and shades would be the required attire for the night!!

 

Nama, as we know, continues to set up its grip on the Irish nation so that it can suck us dry over the next however many years. I note that even less of the loans than previously thought are actually having repayments made to them - below a third was the last thing I read - and that they are probably worth even less than feared. We seem to be setting ourselves up for a serious fall. One would assume that means Nama has to rewrite its business plan if the basis on which it was originally written has changed? How will that affect the situation Mr Lenihan? Will it not now break even as promised? I think we should be told. We seem to be accumulating lots of empty houses and buildings. I wonder if any bright spark in the Government has thought about making them available (free) to new start-up businesses rather than bulldozing some of them as has been mentioned. I presume they will bulldoze them though as re-inflating the property bubble seems far more important to our beloved leaders than doing anything about job creation.

 

Unemployment and the lack of any jobs creation strategy continues to cause misery and despair across the country. We are told it may ‘peak’ later this year or some time next year. I am still in touch with many people who became unemployed at the same time as myself and they are still unemployed - and now classed as ‘long term’ unemployed. I wonder if that term actually means ‘unemployable’ now. I was fortunate enough to be able to go back and study for a year.  I feel particularly sorry for 1) the huge number of young men (the biggest chunk of the figures) who cannot find work, 2) those who are desperately and genuinely looking for work (which is the vast majority of the unemployed, save a few wasters who were already living the life on the dole before these economic problems started) and have seen their unemployment benefits cut, 3) the growing number of long term unemployed, 4) those who feel they have no choice but to leave Ireland to find work - sadly, history has a nasty habit of repeating itself.

 

Anglo and Quinn Insurance continue to intrigue me. I’ve just written up a big piece on how the Government have been moving the argument (about closing Anglo) from its original basis of ‘it is of systemic importance’ to one of ‘it would cost too much to close it down’. I now think they are trying to move the argument back to ’systemic’ again by reversing Quinn Insurance into it and will then wrap themselves in the green flag and tell us they have to protect those 5,500 jobs and cannot possibly close Anglo down. Karl Whelan did an excellent job of analysing the balance sheet recently and I have to say that it looks to me as though it would not really cost any more to close it down in a managed/phased way over 4 years than to keep it open. If that’s the case, surely it is better to close down a festering sore like Anglo rather than keep it open and expose ourselves to who knows what more risk in the future with it? Even if they did manage to clean it up (for somewhere well in excess of €22 billion I would bet) and relaunched it as a lender to SME’s, it would still only get sold on for a billion or two at best and would never recover the investment the taxpayer has made in it. I wonder what dark and dirty secrets lie at the heart of Anglo that closing it down would reveal? I wish I knew the answer to that question - I would win an award then alright! If there are any whistleblowers out there who would like to tell me the real truth about Anglo, you can always drop me a line on josephsblog@dublin.com

 

Bankers had a small amount of hassle in trying to get them to say ’sorry’ when this mess originally broke. One or two made a mealy-mouthed ‘apology’ but it wasn’t really their fault etc. Nobody seems to have asked them to say ‘thanks’ for all the help we’ve given them. I expect what they are actually saying is, "cheers, suckers." I could really do with a banker’s bonus with the summer coming up. I can’t afford to take the family on holiday this year that’s for sure.

 

The falling tax take and resulting growing deficit is still looking very dodgy to me. I’m still expecting an additional budget to ‘rectify’ things before the normal budget in December.

 

I wonder how long Greece will take to finally have to admit that they need the EU/IMF bail-out funds (if the German courts don’t rule out helping them as it’s unconstitutional or against EU treaties before then)? I suspect the average Nikos (Joe) has no idea what has yet to hit them in terms of the financial pain they are going to have to suffer. An IMF team are flying over to Athens on Monday, 19th April. Are they just ‘the scouts ahead of the cavalry?’

 

Recent retail figures are up a little. That took me by surprise. I can’t help but wonder though if it’s largely accounted for by the fact that people don’t go up to the north so much these days to shop as the exchange rate isn’t so great these days? Just the other day, I was listening to a sob story from the Irish Retailer’s Assoc. about how business is falling and there are many more job cuts to come in that sector. Surely people aren’t still borrowing on credit cards etc. to go out and shop? That sounds like insanity in the current environment.

 

Perhaps by the time I get back to posting on here, there will be a jobs creation strategy in place and unemployment will have fallen, Ireland is well on the way back to recovery, a general election has been called and FF are on their way to being wiped out, there will be a really sunny summer……. such a dreamer.

 

Enough already. See you in July.

April 2, 2010

Another Fishy Smelling Rat

Filed under: NAMA, Economic Recovery

 

I smell another one of those fishy rats in Irish politics and business this week.

We have seen Sean Fitzpatrick (ex-Anglo) arrested last week, various shocking NAMA and bailout announcements, Anglo saved by a pack of lies and reporting biggest ever losses (and Bank of Ireland also reporting dreadful losses) and key cashflow parts of Quinn put into administration this week.

It all looks a bit too choreographed to me. I wonder if the ‘establishment’ (or ‘elites’, whatever you wish to call them) have decided that they are offering Mr Fitzpatrick and Mr Quinn up as ’sacrificial lambs’ to keep the public and the tabloids quiet? As they like to say… "draw a line under that".

It’s also very convenient that government has now gone off on 19 days holiday after everything happening in the past few days. These things are never done by ‘accident’.

And truly awful the NAMA announcements and figures have been. What are the key questions though?

Who are the un-named bondholders in Anglo (and other banks) - is there a dark secret in there?

If the first tranche of loans coming from the top builders are this bad (toxic) then what state are the remaining billions in? They could be almost worthless but we the taxpayer will be coughing up €billions for them.

And if the remaining loans to come over to NAMA are in a right state, how well has the financial regulator ’stress-tested’ this using worst case scenarios and should the worst case happen, does that mean we are going to be pumping even more in the way of bailouts into the banks?

And on top of that stress-testing, have they also included a worst case scenario for problems with other loans that are not going to NAMA e.g. mortgages, personal loans, credit cards, etc. and the further impact that might have on the banks? Regardless of the fact that the European Central Bank is keeping interest rates on hold, interest rates on all of these other loans are undoubtedly going up here in Ireland as the government, by its silence about recent interest rate rises, is implicitly giving the nod to banks to put them up to help shore up their balance sheets…. once again, at the expense of the average Joe and Joan in the street.

You can nearly always guarantee with governments (of any shade) that if they are diverting your attention by asking you to look at something then you really ought to be looking elsewhere - where they don’t want you to look.

There is something we are not being told here. What is it? What is the ‘it’ of it?

I will return to add more to this article over the next few days when I have done some digging around.

This item was written after posting the following on irisheconomy.ie on Good Friday 2010:

 

OK - so…. now the dust is settling and our beloved government have conveniently gone off on holiday for 19 days (they do time these things so well), what are all the outstanding (big) questions?

Can we have a go at putting them all in one place (here)?

Obviously, “who are the bondholders?” seems to be on a number of lips.

What are the real losses at the banks and how long is it going to take to disclose them?

What’s the real cost of shutting down Anglo and where’s the proof of that?

I’m wondering (like BL) what the state of the rest of the loans going over to NAMA are like if this first tranche is supposed to be the best of the bunch… and I’m wondering if the financial regulator has really done a stress test on ‘worst case scenario’ should those remaining loans waiting to go over turn out to be a right basket case…. and do they need a further worst case scenario stress test on the non-NAMA loans e.g. how higher than expected mortgage/personal loan/cards/etc. default rates might impact things.

Why did Lenihan ignore Seelig’s (IMF) advice last April - NAMA wouldn’t get credit flowing into the economy - and how did he come to end up on the board at NAMA after that advice?

What are the other big questions we want to see answered?

And am I the only one who thinks all that’s been happening this week plus arrest of Fitzpatrick last week and administrators going into Quinn this week….. is all looking a bit….. orchestrated?

March 9, 2010

Aftershock II

Filed under: Economic Recovery, Unemployment

 

I recently updated my ‘Aftershock’ article. Please see below. The radio programme has also now been made - it was transmitted on Griff FM last month. I will find somewhere to put it up on the web (can’t do it here on my blog sorry) so that it can be listened to or downloaded.

————————————————————————————————-

 

OPINION: Unemployed and struggling with the mortgage? If sub-prime mortgages from the USA caused the initial earthquake in the global financial system, it may be ordinarily sound domestic mortgages that provide the aftershock, writes JOSEPH MORGAN

The website halfaloaf.ie was set up in 2009 as a networking forum for the unemployed. Given the way unemployment has increased by over 200,000 in the past year, and is predicted to rise by at least another 80,000 in 2010, it was a timely launch. According to Central Statistics Office (CSO) figures, the number of claimants is now 436,936.

Some of the financial consequences of this are becoming more apparent. Many Irish banks are starting to reveal the growing number of mortgages reported to be in arrears. Permanent TSB reported that bad loans rose from €15 million to €189 million in the first half of 2009. Within the past few days, Ulster Bank reported that 3.3 percent of its mortgage book is over ninety days in arrears. These small banks are the tip of the iceberg.

Given the push by government, financial institutions and even family to persuade people to buy their own homes in the past 20 years, it would be conservative to assume that only half of those who lost their job in the past year have a mortgage and that only half of those who will lose their job in 2010 have a mortgage. Hard data on this is difficult to find in Ireland.

Let’s say, conservatively, that 170,000 may be unemployed with a mortgage in 2010. That figure seems reasonable at less than one third of the total unemployed by the end of the year. If the average mortgage is around €200,000 then we are looking at a total of mortgages supported by no income at somewhere around the €34 billion mark; a big hole in Irish banks’ balance sheets.

This may all sound like a “back of an envelope calculation” but that would seem to be in the right region given that, according to Central Bank figures, there is a total of over €113 billion in mortgages owed in Ireland. A further sensibility check is that in the first six months of 2008 more than 63,600 new mortgages were issued with an overall value of €13.8 billion.

At current interest rates, the average mortgage of €200,000 gives monthly repayments in the region of €1,100 depending on the type of mortgage and who the lender is.

After several benefit payment cuts in 2009, with more planned in 2010, the basic unemployment benefit for people of working age is €196 per week.  Depending on the claimant’s family circumstances they can claim €130 per week for their partner and €29 for each child. With the best will in the world, this amount is not going to pay a mortgage of €200,000 let alone put food on the table.

There is a means tested benefit that provides short term support to help with mortgage interest repayments. It appears to be very difficult to obtain and “short term” seems to be poorly defined. In a written reply in July 2009, the Minister for Social and Family Affairs Mary Hanafin confirmed that only 12,500 people were receiving it.

If so many people have insufficient help to pay their mortgage when they lose their job, or are only able to pay until their savings run out, there is going to come a point where they can’t pay. That tipping point seems to be approaching fast.

 Nobody seems to know just how widespread this problem is: what the best and worst case scenarios are after redundancy payments and savings have been spent and there is no public money left to help after NAMA bailouts and more bank recapitalisation.

Other factors that may make the situation worse include: the certainty that interest rates will rise soon and increase monthly repayments; additional taxes such as property tax and water rates being applied to the unemployed; more benefit cuts and moving from deflation to inflation.

MABS (Money Advice and Budgeting Service) are believed to be dealing with more than 30,000 cases of people struggling to pay their mortgage. Minister Hanafin announced in August 2009 that 19 MABS offices around the country would get additional staff to help deal with the increasing demand. These additional advisors will bring to 271 the number of money advice staff working in 65 locations around the country. Perhaps even the government now recognise that it is a growing problem.

It is surprising that neither the Finance Minister nor the main banks have raised any red flags over this issue. It is noted though that the legislation for NAMA is quite vague about what types of loans can be taken in. Is NAMA also going to become a depositary for these mortgages in order to further protect the banks?

If not, then post-NAMA we may see a new Irish landlord class as banks that are currently being bailed out (and will be free of toxic debt and obligations to the government) could well end up owning billions of Euros worth of repossessed homes, after the recession in Ireland takes its toll on low paid and unemployed mortgage holders.

There is also the fear that many more jobs may be shed in the financial services sector in 2010, adding to the unemployment figures, once the banks have obtained everything they think they are likely to get from the government and then feel free to do as they please.

The nightmare scenario must be getting fired from what you thought was a safe job with the bank, seeing your mortgage payments increase as interest rates rise and then having your house repossessed by your ex-employer. It is a plausible scenario.

If Ireland is floating in a sea of toxic debt, then mortgages currently held by the unemployed may yet be the tsunami that sinks either our society or the banking system. Would you bet against the banks making sure they are in the lifeboats first?

 

Beware Greeks (and Germans) Bearing Gifts

Filed under: Economic Recovery

 

I see that a sly EU attempt to further control the affairs of countries like Ireland and the other so-called ’PIIGS’ (Portugal, Ireland, Italy, Greece, Spain) has been spun into the newspapers today.

The Germans are proposing setting up a European Monetary Fund (EMF) similar in nature to the International Monetary Fund (IMF).

Angela Merkel, the German Chancellor, is already calling for ‘changes to the treaty’ to set up this EMF. And the ink isn’t even dry on the Irish Lisbon ‘Yes’ vote yet.

I warned that this would happen in an earlier post about the re-run of the Lisbon Treaty vote.

They can change this treaty now to suit themselves and will never have to come back to any country, including Ireland, to have a referendum to approve major changes. They really have effectively side-stepped democracy. Unfortunately, the EU won’t take any notice of me complaining about it or even millions like me. Democracy is dead in Ireland and it’s dead in Europe.

They are also calling for the EU to be able to dictate public sector wages in member states as part of setting up a EMF. A shame they are not calling to dictate the pay in banking and other financial sectors. I wonder why that is (tongue in cheek)?

Now why would you want to set up something that, in effect, already exists ( i.e. the IMF)? Could there be an alternative agenda?

Apart from being more EU-style empire building of a grand (and typical) order, we are all being lined up to be well and truly shafted because the wealthy elite can’t bear the idea of having to pay for their own mistakes themselves.

It will probably take the form of public sector pay cuts and increased taxes that will then go into an annual ’contribution’ from each EU country to this EMF fund.

Then whenever there’s a bank about to go bust or a nation about to default on its debt - and a danger that bondholders (the seriously wealthy) might lose some money - the EU can step in and bail them out. If you think that what Ireland has been doing with bailouts and NAMA is larceny on a grand scale in its move of public money to the private sector, wait until they set this EMF up!

Large (€ billions) contributions from each EU country will add up to a substantial amount of money. If you wonder why they need so much money, you have to wonder what might be going on that we aren’t aware of (maybe even the Irish government isn’t aware of - not big/important enough to be considered stakeholders).

Just how bad is it out there?

There are too many politicians involved in trying to sort out problems (e.g. of an economic nature) that they are not qualified to deal with and too many politicians are simply egos with arms and legs sticking out. When politicians get involved in things they actually know nothing about you have to wonder what the other ‘agenda’ is.

Anyway, talking to some friends of mine who were on holiday in Greece last year, I am convinced that I have the answer to the problems there: a solution that would also enable Germany to help bail them out without making it too overt/direct and upsetting the German electorate (67% do not want their government to give any financial help to any of the PIIGS).

Why not simply introduce a ‘towel tax’ in Greece and the Greek Islands? A cash tax of €10 levied on anyone who puts their towel on a sunbed by the pool before the end of the official breakfast time at the hotel/apartment complex over there.

This would not only raise vast amounts of cash to help Greece with her problems but it would also be a good cultural fit over there as it is ‘cash guv, wink wink, say no more”.

We could even have an equivalent in Ireland - only here, it would probably need to be called a ‘flannel tax’.

Every time someone in government says anything that implies the current problems here were not caused by them we could levy the tax. It would raise a fortune.

February 26, 2010

NAMA Twists and Turns

Filed under: NAMA

 

The original report recommending NAMA as a strategy for removing toxic loans from the major Irish banks was written by Dr Peter Bacon over a year ago. Other than railroading the legislation through with their majority vote and setting up a NAMA board, there has been little real progress by the government since then.


None of these toxic loans have yet been transferred to NAMA, the European Commission has still not confirmed that they will accept its business plan and there is no sign whatsoever of it achieving it’s primary object: getting credit flowing into the real economy again and advancing loans to businesses and individuals.


It is still accurate to describe the banks’ balance sheets as ‘distressed’ given that they continue to hold thousands of impaired loans and that they lack sufficient capital to function to a point where they could aid an economic recovery in Ireland. The government has already pumped in €7 billion in recapitalisation to these banks and according to the investment bank Morgan Stanley, is likely to need to find an additional €9 billion in further bank bailouts once the loans have been transferred to NAMA.


Although the banks (and the government) are suggesting that they could raise this additional capital requirement from private investors, this is very unlikely to happen until these toxic assets have finally been removed from their balance sheets. Even then, canny international investors may not want to put money into the Irish banking sector and the government will have to pick up the bill, increasing their ownership of the banks.


There have also been a couple of interesting twists in recent weeks. The first being a Freedom Of Information request (made by the Irish Times) discovered that the International Monetary Fund ( IMF) had told Finance Minister Brian Lenihan in April 2009, almost a year ago, that NAMA was unlikely to achieve its primary objective of releasing credit into the economy.


Unfortunately, this news came out on the same day that George Lee resigned from the Dail and was largely ignored.  It begs the question as to why the government would go ahead with a scheme when an august body such as the IMF were telling them it wouldn’t achieve what they hoped it would achieve – or at least, what they were saying in public that it would achieve.


Then, just a few days ago, we learned that the Bank of Ireland (BOI) would not be paying the €250 million interest on the recapitalisation money put in so far. As an alternative to cash, which had been expected, they have now issued shares to the government amounting to nearly 16 percent of the company. Since then, shares in BOI have fallen by over 12%, further diluting the value of that repayment.


These shares were issued despite the National Treasury Chief Executive John Corrigan and the Finance Minister both saying just a couple of days before it happened that they could wait to collect the cash dividend. Unfortunately, BOI’s own bylaws required it to issue shares if it couldn’t make the cash payment.  It would appear that John Corrigan and the Finance Minister didn’t actually know that shares were going to be issued and makes you wonder just whether anyone knows what is really going on.


Allied Irish Bank (AIB) are due to make a similar payment in May this year but is also likely to follow the same route as BOI and issue shares instead of paying cash to the Exchequer, further increasing the government’s shareholding in AIB.


Having rejected temporary nationalisation of the banks a year ago, the government seems to be on a course to get to nationalisation by the slowest and most expensive route available. And we will still end up with NAMA and all the potential horrors that may yet bring to the Irish taxpayer if these toxic loans never recover even their face value.


It all seems reminiscent of a joke that was once heard about Iceland:

Q: How do you buy a small bank in Ireland?

A: Buy a big one and wait.

 

p.s. as at lunchtime on Friday, 25th February our (taxpayers) Bank of Ireland shares weren’t doing too well - we are down some €66 million in less than a week emoticon  :

Cost per share 1.358

Current Price per Share 1.000

Gain/(Loss) Per Share (0.358)

 

% Gain/(Loss) (26)

 

Gross Cost of 184,394,378 Shares €250,407,565

 

Unrealised Gain/(Loss) (€66,013,187)

 

 

February 19, 2010

Willie O’Dea

Filed under: Sound Bites

Imagine if a journalist had interfered in the electoral process to the same extent and had then lied in an affadavit about it?

Where do you think that journalist would be now?

I will give you a couple of words as clues - ’sacked’ and ‘jailed’.

I’m clearly in the wrong business.

February 6, 2010

A Fair Deal For Irish Homeowners In Trouble

Filed under: Economic Recovery

This article will be up shortly. In the meantime, please read some of my previous articles while you are here!!

We are clearly facing a potential crisis with people struggling to pay their mortgages in Ireland - as I predicted in my article ‘Aftershock’ (see below) last August.

Is it possible to find a way of helping mortgage holders in negative equity/struggling with their monthly mortgage repayments by structuring something based on the type of home equity release/reversion/income plans popular in the UK?

This article will look at potential solutions that are equitable to both mortgage provider and mortgage holder.

I’m currently writing the article so it should be up in 2-3 days.

December 21, 2009

2010 Predictions

Filed under: Sound Bites

Predictions for 2010 – in no particular date order. Is it a spoof? Or might some of them come true? It will be interesting to leave these up on the blog and revisit them next Christmas to see how many I got right!!

There will be no legally binding (or effective anyway) climate change agreement in 2010 as Obamateur fails to persuade congress that the USA needs to do their bit too…….. and China, Brazil and India etc.  simply don’t engage as it isn’t in their interests to do so. The world heats up so much that even Mary Harney thaws a bit.

Somebody will try to assassinate a major western leader and there will be a ‘Mumbai-style’ attack in a European capital. World stock markets will plunge before mid-year. There will be a rash of other smaller terrorist incidents around the globe, aimed at economic targets. It turns out that Al Q’Aeda had set up a hedge fund and were short selling throughout the year.

There will be a lot of strikes in Ireland and the rest of Europe…..the worst ones will be in Greece. Some will turn into riots. Sadly, that’s probably not a joke.

The argument about NAMA getting credit flowing again becomes irrelevant as nobody wants the banks’ credit anyway. Nobody can then think of a good excuse as to exactly why NAMA was set up then. Lenihan decides to sell back the assets to their original owners for half the price we paid for them. The Irish population are up in arms for five minutes but, before they can get off their backsides, a new series of strictly come cooking bacon sarnies (or some other equally cheaply made reality TV programme) comes on and people turn back to their remote controls.

A European country will default on their sovereign debt, causing major problems to European Monetary Union (EMU). Some other smaller countries around the world quickly fall soon afterwards in a domino effect. Gordon Brown steps in to sort it out as usual (well, to tell us he’s saved the world anyway).

Bankers find a way around having to pay any tax on bonus payments. A no-brainer really.


Brian Cowen will call a snap election when he thinks that there is no real support for the opposition. Meanwhile, Brian Lenihan will usurp him as party leader before the election actually takes place. Brian Cowen then defects to Labour and completely spoils their chances too.

Unemployment will continue to rise in Ireland (and elsewhere) and will increase ahead of the over-optimistic forecasts of 2009. Banks in particular will shed a lot of jobs and announce a number of outsourcing deals to places like India. Sadly, that’s probably not a joke either.

The government will make a case for lowering the minimum wage (and maybe even get away with actually lowering it). Private sector employers will cotton on that they can get away with lowering wages across the board under the guise of ‘competitiveness’. It won’t make Ireland any more ‘competitive’ but it will increase the take home pay of board members. Trebles all round!

The price of foodstuffs will shoot up again by Q2, closely followed by oil. Also possibly a no-brainer.


Fine Gael will replace Enda Kenny as he continues to make no progress against a government that you would have thought any able opposition leader could have brought down by now. In the ensuing scramble to replace him, Richard Bruton gets tripped up by George Lee and takes his ball home.

The Irish banks, once free of any obligation to the taxpayer/government after they have dumped all their rubbish into NAMA will then put up interest rates fairly early in 2010 (even before the European Central Bank (ECB)  puts them up) and as people find themselves unable to make their monthly mortgage payments, the banks will repossess a lot of houses in the second half of 2010 and the government will do nothing about it. Banks become the biggest landlord in the state then realise they’ve shot themselves in the foot as they’ve flooded the market with cheap property. Doh!

The phrase “the rate of increase/decrease is slowing down” is voted most naff phrase of 2009.


The ECB will put up their interest rates in the second half of 2010 as France and Germany’s inflation moves higher – regardless of what’s best for the other European countries. Irish banks will then put up their interest rates again and claim that ‘God made them do it’.

The price of property in Ireland will move even lower and more than 50% of all mortgage holders will find themselves in negative equity. The term ‘strategic default’ enters the Irish lexicon as thousands of people post their keys back to the banks as they are getting on the plane to leave the country. Unfortunately, they place their envelopes containing said keys into the Ryanair complaints box and as it’s never opened, the banks don’t get the keys and are unable to let themselves in to repossess the properties.

There will be riots in China as growth figures are not met and unemployment reaches record highs leaving people starving and the Irish government telling us to think how lucky we unemployed are in Ireland as we can at least have bread and water on the table.

Emigration figures reach a record high by mid-year. Even ‘wee Daniel’ leaves. Brian Cowen is seen leaving the country but six months later he sends a video to RTE and says he’s just on an extended holiday and signs off with “I’ll be back” in a heavy east European accent.

Bankruptcy law in Ireland will be simplified but the 500,000 people who apply can’t get their cases heard for the number of house repossessions the courts are clogged up with.

There will be an unexpected budget in Ireland (probably around April) as tax takes continue to fall and it becomes obvious that NAMA is going to lose even more money than thought. Those on social welfare and employed in the public service will get hit even harder this time round as the government keeps using the phrase ‘austerity measures’. Some guy from a school in Chicago flies in and everything owned by the state is sold off to the wealthy for peanuts and the price of everything goes up. Shock therapy abounds.

Pension lump sum payments start to attract tax but the rich will find a way around having to pay by buying and then ‘moving’ to Zimbabwe for tax purposes as Robert Mugabe pops his clogs and the new regime will sell it to anyone, even the Irish. Zimbabwe was such a bargain that they then buy up other small African countries to see if they can create any asset bubbles there.

The USA will look back at their deficit and debt at the end of 2010 and go “what happened?”. Obamateur will see unplumbed depths of popularity ratings. They will all have a good laugh when it turns out that it’s China who’s really sharing the pain as they bought most of the debt and the $ goes as low as the president’s ratings.

There will be an attempt by the central bank to establish an inquiry into why the Irish banking system went so t*ts-up and who actually told the government to implement the bank guarantees and then design NAMA so that none of the elite had to take any financial hits. When those same elites realise that this might be a proper inquiry, that will bring criminal charges, they will fight it tooth and nail. Then it will be discovered that some of those elite had advance warning about the nationalisation of Anglo and sold up before/instead of losing what they had left in it and the what-s-its will really hit the fan. The elites manage to find a couple of innocent scapegoats and their PR machine tidies up the mess. The Irish population are up in arms again but then Nigella Lawson appears on some cheaply produced Irish chat show called The Front Line (It is a chat show isn’t it? It can’t possibly be hard-hitting journalism) and everything gets back to normal.

Given how quiet the Israelis have gone (and that’s always a worrying sign), we have to assume that they will be hitting Iran’s nuclear facilities before too long in 2010. The USA will inevitably get involved as they want regime change there anyway (and hey, they’re already fighting wars on two of Iran’s borders….. so why not?). A regional war in the mid-east in 2010 is about all it will need to finish off the western financial system as the flow of oil dries up and shoots up to over $200 a barrel. Suddenly, we find out that actually, the Iranian army are a completely different kettle of fish to the Iraqi’s under Saddam and it all goes a bit pear-shaped.

While this is all going on, the Chinese try to pull a stroke somewhere (probably invading Taiwan).


There will be a major sex scandal involving a member of the government/cabinet in Ireland (and the UK). At least, that’s what the papers will say anyway and we get to see our first major court case using the new defamation laws.

Ryanair will get a good deal out of Boeing now that they have pretended to end talks about buying more aircraft. He finally gets to introduce paid for toilets.

A person using plain English will get around to properly defining the terms ‘green economy’ and ‘smart economy’. Ireland will then realise that actually, it isn’t likely to have either at some point in the future.  So we go back to ‘old economy’ and find we haven’t got one of those left either.

Somebody will claim to have found the face of someone holy in a crisp/tree stump/piece of chocolate and will sell it on Ebay for millions. Someone else will find the face of a spud in a Brian Cowen.

A new political party will start up in Ireland, representing the unemployed, low paid and an assortment of others who are generally hacked off with the current lot. I will probably start it!!

Bulletin boards will become reality TV as the media sink to new lows. Jedward become the ‘Ant and Dec’ of Ireland. Simon Cowell becomes editor of the Financial Times. You couldn’t make it up.

IBM invent the paperless toilet to go with the paperless (as if) office.


Ireland win a second grand slam and Leinster win the Heineken cup again. Now I really  am dreaming so it’s time for me to go.

Merry Christmas everyone. If next year turns out to be only half as bad as above, it will be better than I think it’s going to be.

November 5, 2009

MERRY CHRISTMAS MR. COWEN

Filed under: Economic Recovery, Unemployment

5th November 2009


OPINION: As the Christmas lights are now up in the shops, it is time wish An Taoiseach a ‘Merry Christmas’, writes JOSEPH MORGAN

 

 

Pulling into the car park at the shopping centre in Newry, Northern Ireland, at the weekend, I couldn’t help but recall the words of An Taoiseach, Brian Cowen, earlier this year as he criticised the public for ‘cross-border shopping’. At the time, it was all being blamed on a 30% drop in the value of Sterling and ‘unpatriotic’ behaviours.

To paraphrase George Orwell: “Shopping in the rip-off Republic good, shopping in Northern Ireland - at greatly reduced prices - bad.” There is nothing quite like the sight of a politician wrapping themselves in the national flag.

What Mr Cowen was less keen to point out is that the government has already started down the road of delivering a ‘triple-whammy’ to the Irish retail sector just in time for the run-up to Christmas.

The first hit came earlier this year. In the budget last April, it was announced that the Christmas bonus paid to welfare benefit claimants would be axed this December. All those in receipt of payments such as state pensions and unemployment benefit normally receive an additional weekly payment just before Christmas to help them through the most expensive time of the year.

There is plenty of evidence to prove that welfare claimants spend all the money they receive directly into the economy as having just enough money to live on means that it all gets spent in the week it is received. That’s an estimated €500 million already gone out of the normal Christmas shopping cash-flow this year.

The second punch is about to be delivered and will be far harder than the first. The next budget statement is due in the first week of December. It has already been widely forecast (by the government, as well as the pundits) that most of the €4 billion in savings required will be achieved by taking the axe to welfare payments and public sector pay. If it comes out of money that is going directly into peoples’ hands then once again, it is coming directly out of the economy and spending into the retail sector.

In addition to those cuts, we are also advised to expect more indirect demands on our money such as property and carbon taxes.

The third strike, and possibly the real knockout blow to the retail sector this Christmas, is much harder to quantify but will potentially dwarf the first two.

In a straw poll of fifty friends and relatives, the overwhelming majority (94%) said that they will be drastically cutting back on their spending this Christmas due to the current economic environment and fears about whether they will have a job this time next year. Some of them have already lost their jobs this year and as the redundancy payment and savings run out, every item of spending is being scrutinised to ensure the mortgage is paid and there is a roof over their heads.

Presents to nieces, nephews, in-laws and other less immediate relatives or friends are for the chop. The extra spending on luxuries for the table will be pared back.

The general feeling of economic depression and fear felt by people seems to be something that our government is completely out of touch with.

Figures from the Central Statistics Office (CSO), released earlier this year, show that sales in December 2008 fell by over 8% compared to a year earlier. I have some bad news for the retail sector here: it’s looking like this December is going to be a lot worse.

And cross-border shopping figures prominently in that prediction. One friend showed me the UK and Irish catalogues of a ‘well known retail chain’ that showed the price for a particular child’s toy at €50 here and £30 (about €33 at current exchange rates) in the North. Her exact words were: “It’s a no-brainer really. I’m going to be buying all the presents in Newry and I might as well get the food and the wine while I’m there as that’s cheaper too.”

Meanwhile, back in the car park, the long queue of cars with Dublin registrations lined up one after the other made spotting a local Northern Ireland plate rather like looking for a hen’s teeth. Those shoppers were clearly paying a lot of heed to our leader’s words.

The ‘consumer-led recovery’, allegedly to be brought about by NAMA getting credit flowing into the economy again, is one of the key drivers that our government is telling us will lift the Irish economy out of recession.

Quite apart from the fact that my poll shows that nobody wants the banks’ credit facilities in the foreseeable future, Ireland’s economic recovery is starting to look as likely as bumping into the real Santa on Christmas morning. There is a greater chance of seeing the IMF walk in to take over our fiscal administration.

As An Taoiseach sits down to his dinner on December 25th, I hope he spares a minute to think about the many thousands of men, women and children who have gone without this year. Perhaps he will resolve to reduce his own salary in the New Year to less than that of the President of the United States – it is currently greater - and pump that back into our ailing retail sector if it so concerns him.

Merry Christmas, Mr Cowen.

Joseph Morgan

October 1, 2009

HOW FREE IS FREE?

Filed under: Lisbon Treaty

1st October 2009

OPINION: We (allegedly) have freedom of speech in a democracy and are free to vote as we see fit - so it seems a bit odd that the ‘people have already spoken’ once on the Lisbon Treaty yet we are being asked to vote again, writes JOSEPH MORGAN

 

 

Acres of rainforest have been destroyed in print articles on the Lisbon Treaty vote re-run (and let’s call a spade a spade, we are being forced to vote again) so this opinion article will only go out on the ‘interweb’.

Here’s a prediction for you: 60% of the Irish electorate will vote in this referendum. The Yes side, having done a great job of ‘scaring the horses’, will win by 60% (or so) to 40%. This means that the Yes vote will have been pushed through by 36% of the country voting for it. This is called ‘democracy’.

Consider a few questions:

Had the Yes vote carried the day last time, would the No campaign have been given another chance?

What is Ireland’s greatest priority at the moment? Is it getting rid of the current government – an administration that has recklessly managed the economy – and replacing them with a new group that have a clear mandate to do what needs to be done to restore this country to semblance of health…….. or handing over more power to unelected ‘politicians’ in Europe?

Do you really think that Ireland would be thrown out of Europe if we voted No again?

How would people like to have Tony Blair (a man who took his country to war on the basis of weapons of mass destruction that never existed) as the first president of Europe?

Have you read the Lisbon Treaty and do you understand it? Would you sign any other kind of contract if you didn’t understand it?

Do you think all the other (governments of) EU states were right not to give their electorates the opportunity to express their opinions in a referendum on the Lisbon Treaty?

Did you know that this is a self-amending treaty and that it is unlikely that Ireland will get to vote in a referendum again on any future changes to these ‘rules of the game’?

Do you think that voting Yes will get you your job back if you are unemployed?

Do you believe that Ireland is really considered by the larger countries to be ‘at the heart of Europe’? Or is the true heart of Europe run by those leaders you always see jostling for a position in the middle of the front row for the group photograph when those EU leaders meet?

What decision do you think the larger countries would take next year if it suited them to raise interest rates but that very move would be damaging to Ireland? Would they hold back for a few months to help Ireland?

Do you believe that the so-called ‘guarantees’ given to Ireland will be upheld 100% over, say, the next ten years?

Do you trust Brian Cowen to be telling you the absolute truth vis-à-vis everything about the Lisbon Treaty?

What did you think of the blatant display of military power at the opening of the European parliament earlier this year?

Do you think the EU will rush to get this treaty finalised if the Yes vote wins on 2nd October  in case the Conservatives (who have promised to give the UK electorate a referendum on this) get in to power in the UK after their general election next year?

Do you believe in the Tooth Fairy and Santa Claus?

Do you believe this treaty promotes higher levels of democracy in Europe?

How free is ‘free’?  

 Joseph Morgan

(is not ashamed to admit he will be voting No)






















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