Lending To Turkeys And It's Not Even Christmas Yet

By Charley Brady

As usual I got it in the neck over the last few weeks for daring to suggest that Ireland is no longer a sovereign nation. Lucky for me that same neck is as hard as a bent banker's pension plan, so it didn't bother me too much.

Still, it was interesting to read the comments from the Professor of Economics at UCD, Mr. Morgan Kelly last week who said exactly the same thing.

If there were to be a toss of the coin between believing any government ministers you can name and believing Morgan Kelly, there's no doubt in my mind who would win every time.

Mr. Kelly both foresaw the property crash and told the government that it had underestimated the cost of the bank bailout.

So he has form, unlike our crowd of chancers who have been reassuring us that "we have turned the corner".

That bloody corner has to be the most famous spot in the country. We've turned it so many times that we're shaking hands with ourselves now. Then again, we're used to wandering around in circles at this stage.

Writing in The Irish Times he indicated the possibility of large groups of homeowners stopping payment of their debts; what he calls "strategic defaults". He says:

"If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency.

"There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same.

"The gathering mortgage crisis puts Ireland on the cusp of a social conflict on the scale of the Land War, but with one crucial difference. Whereas the Land War faced tenant farmers against a relative handful of mostly foreign landlords, the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off."

That's a pretty grim scenario, with people turning on each other rather than the louse bags who have been lying for years at this stage; and that's what really gets me.

At almost no point now do we get the truth from our politicians. They are so desperately covering their well-fed, over indulged asses that they have precious little time for the secondary task of actually governing a country.

The ones in power know that they won't be there for much longer, while the opposition is finally - finally - looking for an election because a lot of the decisions that they would have been forced to take are now almost done and in place. So they're going to be able to relax and point at what the previous shower did.

I can see them already, waving their hands in the air and yelping that if they had been in charge earlier none of this would ever have happened. As usual it will be the electorate that gets shafted.

As grim as anything above is Mr. Kelly's opinion that: "Making an example of Ireland is an easy way to show that bailouts are not a soft option."

He then mentions that the Department of Finance has played host to a team of 'observers' since September who are "known there, dismayingly but inevitably as 'the Germans'".

They're actually of several nationalities but I think that the point is clear: Big Brother is well and truly watching us, as if we hadn't known.

Explaining a lot clearer than anything we have heard form the liars in our government, he goes on:

"The government has admitted that Anglo is going to cost the taxpayer €29 to €34 billion. [What's four or five billion between friends, eh?] It has also invested €16 billion in the other banks, but expects to get some or all of that investment back eventually. [!!]

"So, the taxpayer cost of the bank bailout is about €30 billion for Anglo and some fraction of €16 billion for the rest. Unfortunately, these numbers are not consistent with each other, and it only takes a second to see why.

"Between them, the AIB and Bank of Ireland had the same exposure to developers as Anglo and, to the extent that they were scrambling to catch up with Anglo, probably lent to even worse turkeys than it did.

"AIB and Bank of Ireland did start with more capital to absorb losses than Anglo, but also face substantial mortgage losses, which it does not." Cutting to the chase, the professor says:

"As a taxpayer, what does a bailout bill of €70 billion, mean? It means that every cent of income tax that you pay for the next two years will go to repay Anglo's losses, every cent for the following two years will go on AIB and every cent for the next year and a half after that on the others.

"In other words, the state is insolvent: it's liabilities far exceed any realistic means of repaying them."

Doesn't it make a nice change to have it explained properly? We are so used to our lying public representatives p***ing down our back and telling us it's raining that we don't even mind them laughing in our faces.

Meanwhile we still haven't had a convincing answer to whether or not Brian Cowen, when he was Minister for Finance, knew more than he has let on about the upcoming banking crisis.

It seems unbelievable that he didn't, given the meetings and socialising he did with the bankers; but as usual they will lie until the bitter end, when it has to be dragged out of them.

And still we will never see anybody doing time. Never.

Hope to see you next week.

Same bat-time!

Same bat-channel!

You can reach Charley at chasbrady7@eircom.net