Thursday 27 December 2012

THE DIRTY DOZEN w/e Dec 30th 2012

Final week of 2012 and boy, was it a good year to be bondholder in an Irish bank. The last of the €20+ billion will be paid out this Friday, Dec 28th, a bond of nearly €40 million, unsecured, from Bank of Ireland - more very happy failed punters cashing in at our expense. I wonder, whatever happened to that much trumpeted separation of bank and sovereign debt agreed to last June?

Anyway, Happy New Year to you all, though that much is already guaranteed for those whose bonds 'mature' in 2013, €17bn in total in 2013. Add that to the €9bn in government bonds that fall due in 2013, throw in the projected budget deficit of €14.5bn and lads - we'd better get down to work. That's a hell of a lot of additional debt on top of the debt we already have, don't ye think?

Looking through the next 12 bonds, shown in the table below, I hope the good people in Irish Life & Permanent have been putting a few bob aside over the Christmas, two big bonds coming up on Jan 14th, each for $1.75bn. That's right, a total of $3.5bn due in one day, from a bank we now own outright. What's the budget 'adjustment' for 2013 again???

Sunday 16 December 2012

THE DIRTY DOZEN w/e Dec 23rd 2012

Two sides of the same coin - those pesky Promissory Notes just won't go away.

 I hate to go back over well-harrowed ground, but there still appears to be much confusion over what exactly happened last March. Herewith then one final attempt to explain, using the allegory above - two sides of the same coin.

One side of the coin, and let there be absolutely no doubt about this - the Promissory Note was paid in full to the so-called IBRC (Anglo etc), who then paid it to the Central Bank, who destroyed it as per the terms of the agreement with the ECB.

Second side of the coin - by whom was it paid, and how? Deep breath here: 

1) The government issued a sovereign bond which matures in 2025, which Minister Noonan 'asked' NAMA to purchase; that was the €3.06bn given to IBRC to give to the Central Bank - our money, as we effectively own NAMA;
2) Bank of Ireland then 'bought' that bond from NAMA, earned interest of 5.4% on it for the year;
3) However, there is a 'repo' clause in the bond, under the terms of which IBRC must repurchase the bond at face value (€3.06bn) before Mar 31 2013 - again, our money.
4) If a buyer can be found for the bond in the meantime, the next generation will pay, and because the bond actually cost €3.46bn (don't even ask...), that's what the kids of 2025 will pay on Mar 31st that year; in the meantime, we'll be paying interest of 5.4% on that €3.46bn.

Put very simply, we've taken out a loan at exorbitant interest to make a payment on an existing loan on which we're already paying interest - chasing our own tail, and it looks like this government is planning to do exactly the same for the 2013 Promissory Note. What Pat Rabbitte means when he says 'we didn't pay in 2012, we won't pay in 2013' is that 'we the government' didn't pay. One way or another, however, we the people will pay, and will continue to pay, thus persevering with what is now the most expensive bank bailout in history, a nation enslaved.

On that note, a link to a little video, an application just submitted to the Guinness World Records people. A humourous video, a deadly serious situation

No change in the bonds this week but please have a look at what's coming on Jan 14th 2013.

Sunday 9 December 2012

THE DIRTY DOZEN w/e Dec 16th 2012

Any of you who may be tempted to believe the bullshit being peddled in the last few days from the government spokespeople on the Promissory Notes of 2012, please read this extract from the report  from the Comptroller and Auditor General's office on the Gross Government Debt, Item 2.11, page 20:

The level of Government bonds in issue increased in March 2012 when bonds were issued to meet a promissory note payment of €3.06 billion due to Irish Bank Resolution Corporation Limited (IBRC). The bonds issued will mature in 2025 and have an annual interest rate of 5.4%. As the market value of the bonds at the time was just over €88 per €100 nominal, the State issued bonds with a nominal value of €3.46 billion in order to meet the payment. The yield on the bonds and, therefore, the effective interest rate on the repayment of €3.06 billion, is just over 6.8%.

Contrary to the outright lies being told by various Ministers and allowed go unchallenged by our mainstream media, not alone was the 2012 Promissory Note paid in full to the Central Bank of Ireland, who then destroyed the €3.1bn, it actually cost us as a nation €400,000,000 more than it needed to, at the time.

Read the above; because the 'market value' of the bonds were only €88 per €100 'nominal' at the time, the State (that's us, people) issued bonds of €3.46bn to get their hands on the necessary €3.06bn to give to the Irish Bank Resolution Corporation - Anglo - which Anglo then gave to the Central Bank, which then - under orders from the ECB - destroyed that money. That's the extra €400 million.

Compounding the additional cost of what was done last March, and again referring to the above, the effective interest rate on the €3.06bn is just over 6.8%; we could have got that money from the ECB emergency fund at around 3%. So, not alone did we pay an extra €400,000,000 to get the money, we are paying an additional 3.8% per annum on the €3.06bn - that's another €116,000,000 per annum until 2025, when that bond is due to mature.

That, my friends, was Michael Noonan's vaunted 'deal', that's what it cost. As stated in black-and-white above, the P Note WAS paid; to give the appearance of a 'deal' however Michael went to a new and far more expensive source for the money, issued a sovereign bond that will NOT be paid by this government or even by this generation but now forms part of the legacy we will leave our children.
To give the appearance of having done a 'deal' Michael and Enda engaged in their new favourite sport, 'financial engineering'. The only 'deal', however, was on how they got the money; the P Note WAS paid, on time and in full, but at much greater cost to us, the people.

Now, they're planning to do the same again. The lies, the lies, the lies, the ongoing betrayal of the people at so many levels - it is almost beyond words.

Monday 3 December 2012

THE DIRTY DOZEN w/e Dec 9th 2012

Budget week and if you really want to know the absolute injustice of what's happening to the people of this country,  read Stephen Donnelly and Gene Kerrigan this week, far more eloquent than I.

The next bond due for payment is this Tue Dec 4th, a subordinated bond from Irish Life & Permanent, €10,000,000; after that, a series of six unsecured unguaranteed bonds on Dec 17th totalling €63,000,000, before rounding off the year - fittingly - with yet another unsecured unguaranteed bond of €37,259,146 on Dec 28th. NONE of these fall under the bank guarantee scheme but no matter, all will be paid.

That Dec 28th bond payment is the last of the €20bn+ that will be sucked from our banks this year, all of which we own bar Bank of Ireland and we have a sizable stake in that (15.1%). Only another €17bn then next year, 2013, and sure that's the back broken on dem pesky bank bonds; our backs broken also but who gives a damn about that?

By the way, all these totals in here do NOT include the 'coupon' or interest paid on those bonds but if you take an average of even 2%, then on the €35bn due over the next three years in bonds, our banks will be paying interest of around €700,000,000/annum. That's our money, for the most part, but no mention of it, ever.

Again and again I've made the point here; regardless of whether they are guaranteed or not these bonds are crippling the economy. The money for those payments is generated here, those bond payments are the absolute priority of the banks - why then do you think there is no 'risk' money available to business? If you can prove you don't need you'll get it - not otherwise.

Anyway, there was a little event in the week just past that probably slipped yere notice but then that's understandable - it wasn't highlighted in any of our major media; THIS government renewed the bank guarantee. The banks, you see, still have priority over the people; deeper and deeper into debt this government will lead us, bloodier and bloodier the bites in the austerity budgets as the bailout continues unabated.

Monday 26 November 2012

THE DIRTY DOZEN w/e Dec 2nd 2012

There was a book published recently, The Big Lie by Gene Kerrigan, that I would recommend with all my heart to anyone who would like to learn, in layman's terms, what has befallen us all in the past few decades. If you can't afford to buy it, order it at your local library; if you want to know the truth, it's in there.

I would recommend it particularly to anyone in a decision-making position in this country, to any and all of our politicians, to our union leadership, to our media kings and queens.

All those politicians in the Fianna Fáil and Green Parties who voted to accept the Troika terms in the Memorandum Of Enslavement of Nov 2010 betrayed their own people; all those in the Fine Gael and Labour Parties who now implement those terms as though they were their own have done likewise.

Be under no illusion; though it's titled a Memorandum Of Understanding, read The Big Lie and you'll understand that a Memorandum Of Enslavement is what it is. 

Debt slaves, that's what we've become under those terms, paying off billions in loans we as a people never took out, loans from which we as a people never benefited.

Debt slavery, that's what we will endure for decades, generation after generation paying reparations for a war we never fought. In less than a century we have swapped subservience to one Empire for subservience to another. The ECB are our new Masters, our own government our new well-cushioned Overseers; what was once done from Dublin Castle is now done from Leinster House.

There is still time for our governing party politicians to turn this around, time for them to realise and repair their mistakes. Start by burning the Promissory Notes, all of them, reprint the money extorted from us by the ECB/EU, then give us governance for the people, not just for the priviliged.

For our union leaders, Saturday in Dublin was a start, that was all - late as it was. Now stay with it. A day of unified, general action, bring the country together and let the ECB know - we've had enough.

For our media, were it not for people like Gene Kerrigan I would have long lost almost all hope.

Sunday 18 November 2012

THE DIRTY DOZEN w/e Nov 25th 2012

Next bond due, €2.6m senior unsecured from Anglo on Thursday, mere pocket change for any of their many highly-paid executives, though I have no doubt someplace like St Joseph's Foundation in Charleville would just love to have those few million, would do wonders with it.

Next day, Friday Nov 23rd, next bond, this one a bit more substantial. A cool €1bn, though again it will be paid by a financial institution we now own, EBS. Not that we ever wanted to own those banks and building societies, nor were we ever asked, not even consulted but so what - it's not as though we're living in a democracy.

Drop down through the list of this dozen (baker's dozen again this week, 13 bonds), check the two at the bottom, the truly terrible twins, $1.75bn each!

Have a look at the tables of totals; €3.7bn the next dozen, €20bn in total for this year, €17bn next year, than ask yourself how much we're borrowing to close the budget deficit in both of those years - it's less than what our banks are paying out in bonds.

Total the budget 'adjustments' for the four years 2012/13/14/15, it comes to €12.4bn; total the Promissory Note payments for those same four years and VOILA! - it too comes to €12.4bn. Then ask yourself, for whose benefit are we suffering those four years of austerity?

Check out what the oh-so-generous Troika is lending us under the Memo of Enslavement from Nov 2010, €67.5bn between the three of them, then look at what we've already been forced to plough into our banks, €69.6bn (including the rarely-mentioned NAMA €5.5bn contribution) and again, ask yourself - a bailout by who for who? A bailout for Ireland? God that ECB, such a sense of humour!

We've just completed our 90th week of protest in Ballyhea and Charleville against this ongoing lunacy, marching every week, sun or rain.  We'll be in Ballyhea again next Sunday, week 91; we'll also be in Dublin on Saturday for a 'gathering' of our own, those of us who are still on the island, meeting at the Garden of Remembrance at 1pm (we've been there so often in the last 90 weeks we feel we now have squatters' rights to the place). Sure we might see a few of ye there.

Tuesday 13 November 2012

THE DIRTY DOZEN w/e Nov 18th 2012

A bit of an anomaly this week, an extra bond included making it a baker's dozen, 13 bonds instead of the usual place. The reason? Well, look to the bottom of the list and see for yourselves, the terrible twins. Two bonds, the first two of the New Year, 2013 - our very own January bond-babies though in fact they're not newborn, they simply 'mature' on that date.

I've been asked many times to explain these bonds, all the types and terminology, the issue date, issue currency etc. I don't bother anymore. The world of bonds is an otherworld, confusing even to its own denizens; I'll not get sucked in there.

All we need to know is this, and let there be absolutely no confusion on it. After the launch of the euro and the subsequent access to easy and cheap money, private financial institutions across Europe and the wider world loaned hundreds of billions to private Irish financial institutions. In the early years, from 2000 to 2007, all those institutions made their own tens and hundreds of millions of euro in profit, billions even in some cases, every cent of which they kept for themselves.

All this time those tens of billions were fuelling a property bubble in Ireland but blinded by their greed the financial institutions - in Ireland and abroad - continued their reckless lending and borrowing. That bubble burst, the situation changed, profit became loss and as happens in the capitalist system under which all those deals were done, the lender banks would have to take their haircuts.

That is what SHOULD have happened but as we know now here, to our cost, that's not what actually happened. Those losses have been forced on us, the people. On any level you care to name, that's wrong - pure, simple.

To those who now tell us we MUST pay those bonds, that they are 'Covered', 'Government Liquid Guaranteed', that we are now legally obliged to pay them, I say - where were you when those debts were being imposed on us? Those private financial institutions all took their profits, every cent; they should likewise take their losses. If that debt could be imposed on us, it can be 'unimposed'.

Last Sunday was week 89 of our protest in Ballyhea and Charleville. 

There isn't an economist among us, nor does there need to be. We understand right from wrong and on an issue as fundamental as this, we don't need to understand anything more. We won't be intimidated, we won't be frightened by talk of financial Armageddon (we have Iceland to give the lie to that, at any rate). We have had enough of being blackmailed/strong-armed/bullied/threatened. That bank debt is not ours, was never ours, WILL never rightfully be ours.

Last Sunday we were joined by a group of women from Fenit, in Kerry; all of you will eventually come to understand this same simple unvarnished truth.

Monday 5 November 2012

THE DIRTY DOZEN w/e Nov 11th 2012

Over and over again, ad nauseum even for myself, I've made the point in this blog that what this government is continuing to do in bailing out our banks isn't just morally wrong, it's lunacy, national financial suicide.

We know we're already in trouble, far bigger trouble than is officially admitted. Forget the 108% Gross Government Debt/Gross National Product number; the true ratio of Gross Government Debt (fast approaching €200bn when the exposure to NAMA and Anglo/INBS is factored in) to the far more relevant Gross National Product  (€129bn in 2011) is already off the scale.

Now, I beg you, have a look at TABLE 1 below, the amount of debt coming down the track over the next three years, and tell me this economy is going anywhere but to hell, without even the luxury of a basket.

We don't need Germany or France to tell us we're a 'special case' - patronising, shallow, hollow bullshit. We don't need 'improved' terms and conditions, this odious debt passed on to several future generations, annual reparations for a private war between private banks. We need debt write-off and we need it now, starting with the Promissory Notes but covering all so-called 'legacy' debt. Then, and only then, can we even begin to consider recovery.

88 weeks we've been marching in Ballyhea and in Charleville in protest at this organised madness; we'll continue marching til everyone else catches up with us.

3 YEAR DEBT SUMMARY (including bank bonds)
Examine the figures, apply to the existing national debt, tell me it's sustainable.

Tuesday 30 October 2012

THE DIRTY DOZEN w/e Nov 4th 2012

Happy Halloween to some lucky bondholders in Anglo who see themselves benefit to the tune of €112,501,125 this Nov 1st, courtesy of the ECB and its puppet Irish government.

We're a 'special case', according to Merkel and Hollande, and indeed we are. Never in history has there been a bank bailout by a sovereign people that comes even close to what we have been forced to do. €64.1bn from us, another €5.5bn from NAMA, that comes to €69.6bn, which is over €15,000 for every resident of this state.

Will we get that money back? This is the €69.6bn question, isn't it, the so-called 'legacy' debt, and it's the question Germany - including Merkel - has already answered with a resounding 'nein nein nein'. After some pleading from Enda we got a few meaningless statements, including the above recognition that Ireland is a 'special case'. But even a vague commitment that we will get even a cent of the €69.6bn back? Nein, nein, nein.

It's simple, isn't it? Far from committing to repaying the billions we've been forced to use to bail out our failed banks, neither Germany nor France even acknowledges that this debt is owed and yet this government of ours is now prepared to wait til the middle or end of next year to see what will happen.

As for the odious Promissory Notes, we're told they're negotiating an extension of terms and conditions - this on a debt that most certainly was never ours, on notes we should just tear up now.

Herewith anyway the numbers on the next dozen bonds.

Monday 22 October 2012

THE DIRTY DOZEN w/e Oct 28th 2012


A Reassuring Lie, starring Enda, Eamon, Micheal & Pat

Yet another empty statement from Angela Merkel and we're all supposed to jump for joy. Words, that's all, empty words; if the EU/ECB (which she seems to own) is going to give us our money back, then let them state precisely that, in simple straightforward terms. Of course there is no intention to repay a cent of Ireland's so-called 'legacy debt' but yet again we're fobbed off (the middle of next year at the earliest before anything is done, says Enda) and yet again we buy the rhetoric.

It's double-edged of course - the world is also buying the same kind of empty rhetoric from our own government. There is a version of the Irish economy which is being presented to the world by Enda, Eamon, Michael, Pat and the rest, and then there are the facts.

Let’s start with the debt/GDP headline figure for 2011 as reported by Eurostat in April of this year:
Gross Government Debt (GGD): €169.3bn
Gross Domestic Product (GDP):  €156.4bn
Ratio GGD/GDP: 108.2%

Now let’s look at the facts as they pertain to Ireland.

The GGD above does NOT include the government exposure to Nama debt, which Namawinelake reckons to be €27bn in government-guaranteed bonds (the reckoning is based on NAMA's accounts and the schedule of outstanding bonds updated on the website); neither does the GGD total above include Irish government exposure to possible losses in the IBRC which, when the interest of €18bn on the Promissory Notes is taken into account (we pay that interest), could be to the order of €15bn.

On the other side of that coin, the Irish Examiner's Ann Cahill had a recent article in which the EU itself complained that the multinationals were skewing the figures in their claims for production in low-tax Ireland, which – by extension – means they are also skewing the figures for GDP (three times as productive as the EU average, twice as productive as the Germans - I mean we're good, but we're not that good!). Most economies have very little difference between GDP and the more pertinent GNP (Gross National Product) but this is not the case in Ireland. Here, because of the multinationals, there is a huge difference; our GNP for 2011 was €129bn.

Now do the calculation:
TRUE GGD: €202bn (est.)
GNP: €129bn
Ratio True GGD/GNP: 156.5%

Already we’re well past the point of no return but throw in a few other very relevant facts from the Irish economy.

2013 –  €17.4bn; 2014 – €5.9bn; 2015 – €11.7bn 
2013 –  €6bn; 2014 – €8.2bn; 2015 – €3.6bn 
2013 – €3.06bn;  2014 – €3.06bn;  2015 – €3.06bn

2013 –  €26.5bn; 2014 – €17.2bn; 2015 – €18.4bn

Have I mentioned projected budget deficits? 

According to the government figures the current unemployment rate is around 14.8%; according to a source I would rather trust, economist Constantin Gurdgiev, the true figure is over 17%. 

Consider this then. To address all the above problems, while slashing spending the government is simultaneously increasing taxes, trying to squeeze additional revenue from a decreasing workforce in a situation where Ireland’s private debt overhang already exceeds that of any other European nation – nearly double that of Greece. Blood from a stone?

How does all of this add up? Enda, Michael, Eamon and the rest of the government believe that by presenting the false figures, the false front, they will encourage foreign investors to come to Ireland, this famous FDI we’re all learning about in this crisis – Foreign Direct Investment. Meanwhile they are making things impossible for the existing indigenous businesses to continue to operate.

If we are to get ourselves out of this mess we need a bank debt writeoff. It’s that plain, it’s that simple. And right now, just for starters, we need to tell the ECB - we’re not paying another cent of Promissory Notes, not a cent. Not because we want to play hardball, not because we want to show that Ireland isn’t a country to be messed with, not even because of the absolute injustice of what’s been forced on us, but because we can’t pay. 

The bank debt burden is crushing Ireland, surely and not-so-slowly anymore. We need to protest, we need to let the world know the true story. In Ballyhea and Charleville we’ve been doing it for 86 weeks. This Saturday we’re heading up west, stopping off at Ennis (O’Connell Monument 9.15am), Galway (Bus Station 10.45am), Castlebar (Spencer Street 12.45pm), Sligo (O’Connell Street 2.30pm), Donegal (Lidl carpark 4.45pm). If you're anywhere around those areas, we’re asking for your support. Meanwhile, the next 12 bonds, the bonds we're told don't matter any more, starting with two bonds being paid today that total over €740,000,000.

Regards, Diarmuid O'Flynn