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Old 01-03-2011, 06:30 PM   #121
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Bono should forget debt relief in Africa. He should focus on debt default for Ireland. The country has accepted a bailout plan that looks as bad as the reparations Germany was forced to pay to the Allies after World War One.

Spiralling debt led to disaster in Germany and it is a well-trodden path to poverty perfected by African despots. Ireland's most famous musical frontman should start to lobby the EU for debt forgiveness and to beg the Dail to legislate a default. Default is not the radical option, it is the rational option.

When the Finance Minister insured the depositors and 100pc of the bondholders in the banking system, he boasted to the world's financial community that the citizens and the taxpayers of Ireland would pay off a €400bn bar tab taken on by 50 drunken Irish real-estate speculators. The Finance Minister baptised the citizens of Ireland with this burden by issuing a one-page press release. Bono has seen corrupt regimes all over Africa do similar things by government fiat -- a corrupt few impoverish the innocent many and the innocent pay the interest for generations. Bono should lobby the Dail to reverse this decision and Ireland should default on the banking debt.

Bono should point out that the exchequer only took €12bn in income tax in 2009. He should mention that with Irish GDP shrinking and the mortgage default rate soaring, each taxpayer is now being asked to take on a €200,000 bank guarantee and a new €42,000 IMF loan. The math won't work.

The U2 frontman has rapped debt relief with Angela Merkel before, and he needs to make her aware that Ireland's 'real-estate reparations' are similar in scope to German World War One reparations. After the Treaty of Versailles, the Weimar Republic was forced to accept debt of more than 150pc of the country's Net Social Product, a precursor measure to GNP. Later in the 1920s, after two near defaults, this burden was reduced by the Allies to 75pc of GDP. It still led to disaster. Last month it was projected that Ireland's debt would stand at 120pc of GDP and it is still growing.

It is not that Ireland can't default, it is that the Government has compounded their initial error made in the tempest of world financial Armageddon with promises that can't be kept. It will take tremendous political courage to stand up and say "I was wrong and my country can't afford my bad decisions". Bono can help the politicians through the process. The citizens and taxpayers deserve it.

Bradley M Tirpak
3 Old Burlington Street,
London
How to dismantle a financial bomb - Letters, Opinion - Independent.ie
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Old 01-22-2011, 02:13 PM   #122
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So we blame the victims the now.

José Manuel Barroso, the ex-Maoist President of the European Commission, has told Ireland that it is entirely and alone responsible for the disaster that has befallen the Irish people.

“The problems of Ireland were created by irresponsible financial behaviour of financial institutions and a lack of supervision in the Irish market. It was not Europe that created this fiscally irresponsible situation and this financially irresponsible behaviour,” he said.

“Europe is now part of the solution.”

Once a Maoist, always a Maoist, I suppose. Mr Barroso misrepresents what happened, falsely denies any EU culpability, and equally falsely misclaims a “solution” – unless you count the solution of the economic graveyard.

The IMF’s Article IV report on Ireland published in September 2007 begins:

“Economic performance remains very strong, supported by SOUND policies. Given the Irish economy’s strong fundamentals and the authorities’ commitment to sound policies, Directors expected economic growth to remain robust over the medium term.”

The IMF said Ireland was in fiscal SURPLUS of 3pc of GDP and total public debt had fallen to just 12pc. Ireland had almost entirely eliminated its public debt.

Mr Barroso’s own staff signed off happily on Ireland’s accounts in their Stability Update report December 2007, discerning risks but agreeing that the country was “operating responsible fiscal policy”.

For Mr Barroso to talk now about Ireland’s ” fiscally irresponsible situation” is to rewrite history.
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Has Mr Barroso read the excellent paper for the World Bank in March 2009 entitled “What Went Wrong in Ireland” and written by a certain Professor Patrick Honohan, now the governor of the Irish central bank and a council member of the ECB?

It argues that the Tiger economy went off the rails only after joining the euro, and to a great degree because of the euro.

“Real interest rates from 1998 to 2007 averaged -1pc [compared with plus 7pc in the early 1990s],” he said.

So here was a turbo-charged, highly-dynamic economy with negative real interest rates for a decade.

“Eurozone membership certainly contributed to the property boom, and to the deteriorating drift in wage competitiveness. To be sure, all of these imbalances and misalignments could have happened outside EMU, but the policy antennae had not been retuned in Ireland. Warning signs were muted. Lacking these prompts, Irish policy-makers neglected the basics of public finance.”

It is true that Ireland’s regulators made an utter hash of things. But could the Irish have avoided a destructive bubble? The parallel story in Spain suggests otherwise. The Bank of Spain was one of the best run central banks in the world, the pioneer of “dynamic provisioning”, yet even it could not contain the effects of an interest rate and currency regime that was so far out of kilter.
Europe’s shoddy attempt to vilify Ireland – Telegraph Blogs
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Old 01-25-2011, 02:21 PM   #123
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Do you think that this is Bono's fault?
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Old 02-03-2011, 07:21 PM   #124
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Michael Lewis's long awaited (by me, at least ) Vanity Fair write-up.

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Morgan Kelly is a professor of economics at University College Dublin, but he did not, until recently, view it as his business to think much about the economy under his nose. He had written a handful of highly regarded academic papers on topics (such as “The Economic Impact of the Little Ice Age”) considered abstruse even by academic economists. “I only stumbled on this catastrophe by accident,” he says. “I had never been interested in the Irish economy. The Irish economy is tiny and boring.” Kelly saw house prices rising madly and heard young men in Irish finance to whom he had recently taught economics try to explain why the boom didn’t trouble them. And they troubled him. “Around the middle of 2006 all these former students of ours working for the banks started to appear on TV!” he says. “They were now all bank economists, and they were nice guys and all that. And they were all saying the same thing: ‘We’re going to have a soft landing.’ ”

The statement struck him as absurd: real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become and flee the market, and the market will crash. It was in the nature of real-estate booms to end with crashes—just as it was perhaps in Morgan Kelly’s nature to assume that, if his former students were cast on Irish TV as financial experts, something was amiss. “I just started Googling things,” he says
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Kelly’s colleagues in the University College economics department watched his transformation from serious academic to amusing crackpot to disturbingly prescient guru with interest. One was Colm McCarthy, who, in the Irish recession of the late 1980s, had played a high-profile role in slashing government spending, and so had experienced the intersection of finance and public opinion. In McCarthy’s view, the dominant narrative inside the head of the average Irish citizen—and his receptiveness to the story Kelly was telling—changed at roughly 10 o’clock in the evening on October 2, 2008. On that night, Ireland’s financial regulator, a lifelong Central Bank bureaucrat in his 60s named Patrick Neary, came live on national television to be interviewed. The interviewer sounded as if he had just finished reading the collected works of Morgan Kelly. Neary, for his part, looked as if he had been dragged from a hole into which he badly wanted to return. He wore an insecure little mustache, stammered rote answers to questions he had not been asked, and ignored the ones he had been asked.

A banking system is an act of faith: it survives only for as long as people believe it will. Two weeks earlier the collapse of Lehman Brothers had cast doubt on banks everywhere. Ireland’s banks had not been managed to withstand doubt; they had been managed to exploit blind faith. Now the Irish people finally caught a glimpse of the guy meant to be safeguarding them: the crazy uncle had been sprung from the family cellar. Here he was, on their televisions, insisting that the Irish banks were “resilient” and “more than adequately capitalized” … when everyone in Ireland could see, in the vacant skyscrapers and empty housing developments around them, evidence of bank loans that were not merely bad but insane. “What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the fuck was that??? Is that the fucking guy who is in charge of the money??? That’s when everyone panicked.”
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Two things strike every Irish person when he comes to America, Irish friends tell me: the vastness of the country, and the seemingly endless desire of its people to talk about their personal problems. Two things strike an American when he comes to Ireland: how small it is and how tight-lipped. An Irish person with a personal problem takes it into a hole with him, like a squirrel with a nut before winter. He tortures himself and sometimes his loved ones too. What he doesn’t do, if he has suffered some reversal, is vent about it to the outside world. The famous Irish gift of gab is a cover for all the things they aren’t telling you.

When Irish Eyes Are Crying | Business | Vanity Fair
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Old 02-03-2011, 08:15 PM   #125
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"Bono should forget debt relief in Africa. He should focus on debt default for Ireland. The country has accepted a bailout plan that looks as bad as the reparations Germany was forced to pay to the Allies after World War One."

~financeguy


I agree.
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Old 02-03-2011, 08:23 PM   #126
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Originally Posted by the iron horse View Post
"Bono should forget debt relief in Africa. He should focus on debt default for Ireland. The country has accepted a bailout plan that looks as bad as the reparations Germany was forced to pay to the Allies after World War One."

~financeguy


I agree.
Erhm, that wasn't a quote from me. It was a letter writer to the Irish Independent. Like yourself, I am inclined to agree, however.
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Old 02-05-2011, 09:56 PM   #127
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Erhm, that wasn't a quote from me. It was a letter writer to the Irish Independent. Like yourself, I am inclined to agree, however.


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