In the real of bizarre, we have two fresh statements from Irish officials.
First, NTMA issued a statement claiming that Irish authorities - aka Irish taxpayers - will make up any shortfall on the banks capital side. One wonders if the NTMA has acquired new powers from the State - this time around, to determine our budgetary policy. You see, per European authorities, capital support for the banks is a matter of national deficits. National deficits are a matter of fiscal policy. Fiscal policy is firmly a matter for the Exchequer (i.e the Government). NTMA is neither the Exchequer, nor the Government. What business does it have in making promisory statements to the markets concerning the matters of fiscal policy?
Second, per Reuters report: "An Irish official told The Daily Telegraph that Dublin will "explore the appropriate burden-sharing arrangements" over coming weeks as it fleshes out its plan to break up the nationalised bank. Anglo Irish may ultimately cost Irish taxpayers as much as €25bn". So let's quickly summarize the statement:
- After the economy posted a double dip (GDP side), having lost some €13,000 per every working person in income since the beginning of this Great Recession,
- After all independent analysis has pointed, for some 21 months now to the need to cut loose the subordinated (and senior) debt holders in Anglo, plus subordinated debt holders in other state-supported banks,
- After the above calls by independents was echoed in recent weeks in the international analysts opinions (e.g. RBS),
- After independent analysts have correctly estimated Ireland's exposure to Anglo to be in the region of €33-39 billion, the estimate once again echoed in international analysts estimates (S&P),
- After international bond markets have shown total disapproval for the Government handling of the recession, bidding both bond yields and CDS spreads to historic highs
What we are seeing in their denial is well described in the literature and work of Professor Chris Argyris of MIT.
ReplyDeleteFor example, in the way Argyris describes what he calls the 'Logic of Defensive Routines', he shows how what he calls 'Skilled Incompetence' leads SYSTEMICALLY to:
- Crafting messages that contain inconsistencies.
- Acting as if the messages are not inconsistent.
- Making ambiguity and inconsistency in the messages undiscussable.
- Making the undiscussability of the undiscussable also undiscussable.
I mean, the above has been so bloody apparent in the actions of this country's government and faithful institutions ever since their stupid crony games started blowing up in their faces. I note too that in their denial is an intention to continue on with these stupid crony games under the new rallying cries of 'green economy' and smart economy'...
But this country has become so @#$^ing institutionalised that speaking with one's own voice under the influence of one's own convictions, sense and personal judgement has become like shouting into a deep dark cave.
After all....
ReplyDeletehttp://www.independent.ie/business/irish/any-anglo-default-would-have-to-be-dealt-with-in-english-courts-2347650.html
may hold one explanation why our officials remain in a deep denial about both the extent of the problems and the required course of action.
This denial is much more than only the denial of a debt junkie, it is the denial of someone who knows more and refuses to tell the truth. It is the denial of those who refused a public inquiry into banking matters, for good reasons. What is buried in the IFSC and in Banks such as Anglo, but not Anglo alone is much more than only costs we do not know for certain, not yet.
@Georg Baumann.
ReplyDeleteDublin wasn't known by the name "Lichtenstein on the Liffey" for nothing you know!
A lax regulatory culture attracted many companies to the IFSC.
Some of whom no doubt have skeletons in their respective closets.
@ottogunsche
ReplyDeleteYeppers! I wrote about that in my spanking new blog, that went online 2 days ago, motivated and encouraged by Constantin.
Dublin became known in the world as the financial Wild West in 2005, when the New York times traced back to Dublin the Re Insurance scam of Re Cologne that artificially boosted AIG’s figures. This was a wake up call for many including myself. What the Hell was going on in this IFSC? Well, we learned that very quick...
May be of interest: www.greentechbubble.com